SAP Operating Income Rises 5%

SAP reported third-quarter sales and operating profit that beat analysts’ estimates, boosted by sales of cloud-computing programs and demand for its revamped financial management tools.

For the full year, SAP said it was still expecting operating profits to come in somewhere between 5.6 billion and 5.9 billion euros, adjusted for currency fluctuations. Adjusted operating profit climbed 19 percent to 1.62 billion euros. The sales and operating profits is more than what analysts have expected. Costs remained under control and cloud margins are on the rise.

Shares of the company have increased 4.5% amounting 63.23 euros in Frankfurt. The stock had gained 3.8 percent this year through Monday.

SAP said sales and earnings growth was also strengthened by a weaker euro, something US-based competitors don’t benefit from. They contrasted the German company’s performance with that of Oracle, which last month reported first-quarter revenues that fell short of analysts’ expectations, in part due to the company’s shift to cloud products.

It is hardly surprising then that the company pre-announced cloud revenue grew an impressive 116% to €600 million while bookings grew by 102% to €216 million.

SAP’s software license sales has grown by 4% in constant currency to €1.02bn, which is considered to be important as presently sales of licensed programmes installed on customers’ servers are under pressure across the industries.

“Our robust double-digit progress in cloud and software program income was primarily pushed by wonderful leads to mature markets”, SAP’s chief monetary officer Luka Mucic stated in a press release, including that he anticipated continued volatility and financial challenges in rising markets.

SAP is also undertaking a second consecutive restructuring this year thats eliminating about 2,200 jobs while pushing to hire younger workers.

-With assistance from Claudia Rach in Berlin.