SAP Beats Q4 Earnings Estimates - Analyst Blog
SAP AG (SAP)
reported fourth-quarter non-IFRS earnings per share of €1.11
($1.62), which increased 20.6% year over year and surpassed the
Zacks Consensus Estimate of $1.59 a share by 1.9%. The company’s
flagship innovation, SAP HANA, continued to be a growth driver
along with its cloud business, Ariba.
Total revenue generated in the
fourth quarter of 2013 was €5.1 billion ($6.9 billion), up 7% year
over year at constant currency. Revenues were in line with the
Zacks Consensus Estimate of $6.9 billion.
Software & Could Subscriptions:
This segment includes Software and Maintenance revenues. The
segment garnered revenues of €2.1 billion ($2.8 billion) in the
quarter, up 6% year over year at constant currency.
Support Revenues: The segment
reported revenues of €2.3 billion ($3.1 billion), up 10% year over
year at constant currency.
Software and Software-Related
Service Revenues: This sub-segment includes Support, Subscription
and other software-related services revenues. Revenues in this
segment grew 8% year over year to €4.4 billion ($5.9 billion).
The EMEA region reported high
single-digit growth, with non-IFRS software and cloud subscription
revenue increasing 9% at constant currencies. This increase was
primarily driven by high double-digit growth in cloud subscription
and support revenue across the region and strong double-digit
software revenue growth at constant currencies in Germany, France,
Russia, Middle East and Africa.
Non-IFRS software and cloud
subscription revenue in the Asia Pacific Japan (APJ) region
continued its trend of double-digit growth at constant currencies,
driven by a strong performance in China.
The Americas region saw
single-digit revenue growth at constant currencies in the fourth
quarter in the non-IFRS software and cloud subscription segment.
This was the result of the transition to the cloud and a tough
year-over-year comparison in software revenue.
Cash and Balance
Operating profit grew 15% year over
year to €2.1 billion ($2.8 billion) in the quarter.
Operating cash flow was €3.83
billion ($5.2 billion), increasing marginally year-over-year while
free cash flow was €3.27 billion ($4.6 billion) decreasing slightly
year-over-year. Free cash flow was 19% of total revenue and cash
and cash equivalents grew 31.4% year over year to €3.3 billion
Concurrent with the earnings
release, management provided guidance for fiscal 2014.
The company expects full year 2014
non-IFRS cloud subscription and support revenues to be in the range
of €950 to €1,000 million, at constant currencies. The upper end of
this range represents a growth rate of 32%.
The company expects full-year 2014
non-IFRS software and software-related service revenue to increase
by 6%– 8% at constant currency and full-year 2014 non-IFRS
operating profit to be in the range of €5.8 billion to €6.0 billion
at constant currency.
This apart, the company also
provided mid-term 2014 guidance. SAP expects the combination of a
stable, highly-profitable core and fast-growing cloud business to
deliver continued growth and margin expansion. The company aims to
further increase its total revenue to at least €20 billion and
total revenue from its cloud business including cloud-related
professional services to approximately €2 billion by 2015.
SAP currently holds a Zacks Rank #3
(Hold). Better-ranked stocks in the sector include American
Software, Inc. (AMSWA), CA Technologies
(CA), both carrying a Zacks Rank #1 (Strong Buy) and Concur
Technologies Inc. (CNQR) carrying a Zacks Rank #2
AMER SOFTWARE A (AMSWA): Get Free Report
CA INC (CA): Free Stock Analysis Report
CONCUR TECH INC (CNQR): Free Stock Analysis Report
SAP AG ADR (SAP): Free Stock Analysis Report
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