SAP Gives Doubters Soothing News

In light of recent troubles, the software giant's first-quarter earnings announcement had some investors nervous, but results were pleasing

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By Andy Reinhardt

April 21, 2007 at 12:32 AM UTC

This article is for subscribers only.

Though German software giant SAP (SAP) hadn't given the market any sort of cautionary warning before its first-quarter earnings release on Apr. 20, investors were still nervous heading into the news. After all, SAP's 7% revenue growth last quarter came in shy of expectations, helping spark a stock sell-off from which its shares still haven't recovered (see BusinessWeek.com, 1/12/07, "SAP Sags on Slower Growth").

What's more, archrival Oracle (ORCL) posted strong quarterly numbers a month ago, with revenues up 27% and profits up 35%. That suggested the California maker of databases and business management software could be gaining ground on SAP (see BusinessWeek.com, 3/21/07, "Oracle: Beating Indigestion"). And during the first quarter, SAP was rocked by two surprises: the resignation of its boy-wonder software architect, Shai Agassi, and a blistering lawsuit from Oracle accusing the company of stealing Oracle's intellectual property.