SAP Shares Climb After Strong 4Q, Adjusted 2025 Targets
24 Janeiro 2024 - 5:56AM
Dow Jones News
By Mauro Orru
SAP shares edged higher Wednesday after posting revenue and
operating profit ahead of analysts' expectations for the fourth
quarter and tweaked some 2025 targets to factor in recent
accounting changes and the expected benefits of a new restructuring
program.
At 0820 GMT, shares in the German business-software company
traded 7.2% higher at EUR160.06. The stock is up some 15% since the
year began.
Reporting on a non-IFRS basis, SAP said late Tuesday that total
revenue climbed to 8.47 billion euros ($9.19 billion) from EUR8.06
billion in the fourth quarter of 2022. Revenue from SAP's cloud
business jumped to EUR3.70 billion from EUR3.08 billion, while
software-licenses revenue slipped to EUR841 million from EUR907
million.
Operating profit fell to EUR2.51 billion from EUR2.56 billion,
with SAP's operating margin falling to 29.6% from 31.7%.
Analysts had forecast total revenue of EUR8.32 billion and cloud
revenue of EUR3.72 billion on an operating profit of EUR2.47
billion and a 29.9% operating margin, according to a
company-provided consensus on a non-IFRS basis.
For 2024, SAP expects non-IFRS operating profit at constant
currencies between EUR7.6 billion and EUR7.9 billion, cloud revenue
at constant currencies between EUR17 billion and EUR17.3 billion
and free cash flow of roughly EUR3.5 billion.
SAP added that it plans to undertake a restructuring program
this year that will affect some 8,000 jobs, ratcheting up its focus
on artificial intelligence. Most of the costs related to the
restructuring, currently estimated at about EUR2 billion, should be
recognized in the first half of the year. Excluding restructuring
expenses, the overhaul is expected to convey only a minor cost
benefit this year.
The company tweaked some 2025 targets to reflect its
fourth-quarter performance, the updated non-IFRS definition of
profit measures, and the expected benefits from the new
restructuring program.
By 2025, SAP now expects non-IFRS operating profit of roughly
EUR10 billion, including share-based compensation expenses of
approximately EUR2 billion, as opposed to about EUR11.5 billion
previously, excluding share-based compensation expenses. Free cash
flow should be approximately EUR8 billion, compared with around
EUR7.5 billion previously.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
January 24, 2024 03:41 ET (08:41 GMT)
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