SAP Lifts Sales Outlook, Buying Back Stock on Cloud Growth
July 20, 2017
Grazed from Bloomberg. Author: Editorial Staff.
Software giant SAP SE raised its annual revenue outlook and said it would buy back up to a half billion dollars in stock after reporting a better-than-expected jump in sales, lifted by a revamped version of its flagship software. The German maker of applications that run businesses’ finances, manufacturing and personnel is projecting sales of 23.3 billion euros ($26.8 billion) to 23.7 billion euros this year, based on constant currencies.
That’s up about a 100 million euros on both ends of its prior forecast. SAP is about to start a share buyback of up to 500 million euros this year, and it raising its outlook for cloud and software revenue. Shares of SAP fell 0.4 percent to 90.94 euros at 9:26 a.m. in Frankfurt. SAP had lost 2 percent since its first-quarter report April 25, while Germany’s 30-stock Dax Index was largely unchanged as of Wednesday’s close…
“This is very much a replay of Q1 – good revenues, but disappointing margins," said Michael Briest, an analyst at UBS. “The cloud gross margin will come in for particular scrutiny – sales are growing fast but costs faster." SAP’s gross margin for online software fell 2.4 percentage points from a year ago to 64.2 percent, reflecting R&D and sales costs…
Read more from the source @ https://www.bloomberg.com/news/articles/2017-07-20/sap-lifts-2017-sales-outlook-as-hana-adoption-sustains-momentum