SAP shares jump after better-than-expected quarterly results
FRANKFURT (Reuters) - Shares in SAP jumped 7% on Thursday to the top of Germany's blue-chip index after the software maker confirmed its outlook and said its quarterly business activity recovered from the effects of a global lockdown faster than expected.
Total revenue in the period increased by 2% to 6.74 billion euros ($7.64 billion). Software licenses, SAP's cash-cow business, slumped 18%, and cloud revenues were up by the same amount.
"Software licenses revenue, while still below normal levels, recovered more than expected", SAP said in a pre-released earnings statement, adding that the revenue showed a strong sequential improvement compared to the first quarter.
Europe's most valuable technology company confirmed its 2020 outlook for an operating profit, adjusted for special items, in a range of 8.1 billion-8.7 billion euros, a fall of 1%-6% at constant currencies.
Analysts at Jefferies said SAP's unchanged 2023 guidance, which used to look realistic before the pandemic, implies a very strong rebound in new cloud bookings in 2021 and 2022.
Operating profit increased by 7% to 1.96 billion euros as SAP slowed hiring new staff and cut costs, including by spending less on travel and staging more virtual events.
"Our quick response to the crisis on the cost side drove strong operating profit and margin expansion," Chief Financial Officer Luka Mucic said in a statement.
SAP said it will continue to invest in innovation to emerge from the COVID-19 crisis even stronger.
SAP plans to publish full second-quarter earnings on July 27.
($1 = 0.8827 euros)
(Reporting by Arno Schuetze and Caroline Copley; Editing by Leslie Adler and Edward Taylor)
