SAP third quarter operating profit beats estimates on mature markets

Analysts had expected the figure, which was seasonally adjusted, to come in between 1.45 billion and 1.59 billion euros.

IFRS total revenue was 4.98 billion euros, up 17% from 4.25 billion euros in the prior year.

SAP stated third-quarter operating profit, excluding particular gadgets, rose to 1.sixty two billion euros ($ 1.eighty four billion), beating probably the most optimistic estimate amongst 14 analysts, with particular person estimates starting from 1.forty five billion to 1.fifty nine billion euros, in accordance with Thomson Reuters knowledge.

SAP released its key results ahead of the scheduled release data on October 20.

The company expects its full year non-IFRS operating profit of €5.6bn to €5.9bn at constant currencies, which could mean that the company might have flat growth or a rise of 5% from €5.6bn last year. The stock has increased 3.8% this year through Monday.

SAP and rivals such as Oracle Corp. are navigating the transition to computing as a service over the Internet.

Though the move provides opportunities to enter into new markets, it also poses challenges for the companies whose traditional business is of selling licenses for software installed on corporate systems. Redwood City, California-based Oracle last month reported fiscal first-quarter revenue that fell short of analysts projections, crimped by a slowdown in software license sales amid a shift to cloud products. Cloud software makers argue that in the longer term they can make up the shortfall through subscription and services revenues.

“Our strong double-digit growth in cloud and software revenue was mainly driven by excellent results in mature markets”, said chief financial officer Luka Mucic.

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

The Company reiterated 2015 outlook.

-With assistance from Claudia Rach in Berlin.