Big Cap Software Companies Posting Blowout Numbers
July 19, 2007, 8:39 am
SAP Shares Jump On Strong Earnings and Outlook
Posted by Eric Savitz
Shares of German enterprise software giant SAP (SAP) are poised for a big day, following a strong second quarter earnings report. The company said total revenue in the quarter was up 10%, or 14% in constant currencies, to 2.42 billion. Operating income was up 10% year-over-year; net income was up 8%. Software revenues, a key measure, were up 18%, or 21% in constant currencies.
The company said it took market share in the core enterprise software market in quarter for the sixth quarter in a row.
�The second quarter was an excellent quarter for SAP with double digit growth in all regions, and we continued to gain share against core enterprise application vendors,� SAP CEO Henning Kagermann said in a statement.
SAP repeated the full-year guidance it provided in January for software and software-related services revenue up 12%-14% at constant currencies. The company sees operating margin in the range of 26%-27%, and an effective tax rate of 32.5%-33%.
As Marketwatch notes this morning, the results beat expectations thanks to strength in licensing revenue in Europe.
Certainly SAP had a big quarter; combined with IBM�s strong results yesterday, indications are growing that corporate IT spending is impressively robust.