SAP Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

SAP (NYS: SAP) reported earnings on July 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), SAP beat expectations on revenues and missed estimates on earnings per share.

Compared with the prior-year quarter, revenue expanded and GAAP earnings per share dropped.


Margins dropped across the board.

Revenue details
SAP logged revenue of $4.94 billion. The 22 analysts polled by S&P Capital IQ foresaw revenue of $4.82 billion on the same basis. GAAP reported sales were 3.1% higher than the prior-year quarter's $4.79 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.85. The 11 earnings estimates compiled by S&P Capital IQ anticipated $0.89 per share. GAAP EPS of $0.70 for Q2 were 1.4% lower than the prior-year quarter's $0.71 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 68.9%, 130 basis points worse than the prior-year quarter. Operating margin was 22.6%, 710 basis points worse than the prior-year quarter. Net margin was 17.0%, 80 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $4.67 billion. On the bottom line, the average EPS estimate is $0.96.

Next year's average estimate for revenue is $19.37 billion. The average EPS estimate is $3.94.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 341 members out of 386 rating the stock outperform, and 45 members rating it underperform. Among 100 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 86 give SAP a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SAP is outperform, with an average price target of $65.27.

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The article SAP Increases Sales but Misses Estimates on Earnings originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is the co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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