) reported fourth quarter and full year 2012 results. Earnings
per share for the quarter were €1.14 ($1.47), up 7.0% year over
year and 16.7% above the Zacks Consensus Estimate of $1.26 a
share. Profits during the quarter were driven by delivering
specific industry solutions strategic investments in its flagship
innovation SAP HANA.
SAP also has one of the best cloud portfolios for its clients
in the industry. Total revenue was €5.0 billion ($6.51 billion)
in the fourth quarter of 2012, up 11% year over year on constant
Revenue by Segment
Software & Could Subscriptions Revenue (41.4% of 4Q12
This segment includes Software and Maintenance
revenue. The segment revenue in the quarter was €1.93
billion ($2.5 billion), up 8% year over year in constant
Support Revenue (42.9% of 4Q12 revenue):
The segment reported revenue of €2.1 billion ($2.7 billion), up
10% year over year (on constant currency basis).
Software and Software-Related Service Revenue (84.3% of
This sub-segment includes Support, Subscription, and other
software-related services revenue. Revenues in this segment grew
14.6% year over year to €4.2 billion ($5.5 billion).
Some of the leading clients of SAP include
American Express Company
Revenue by Region
During the fourth quarter of 2012, revenue from the EMEA grew
5.9% year over year to €2.36 billion ($3.1 billion). EMEA
software revenue increased 8.4% and the emerging markets such as
Middle East and Africa performed well. In the EMEA, companies in
the German banking industry such as
Deutsche Bank AG
The Americas grew 15.5% year over year during the reported
quarter, driven by a 37% growth in software. This robust growth
was driven by the company's partnership with the NFL. The NFL
looks forward to SAP's cloud-based applications and analytical
solutions to transform its fantasy football platform. In
addition, Latin America also reported strong growth on the back
of robust performances in Brazil and Mexico.
APJ expanded 15.6%, driven by a 21.7% improvement in software,
attributable to growth in two of the largest economies in the
region, namely, Japan and China. SAP's Industrial Solutions
business is a strong driver for growth in China.
Cash and Balance Sheet
Operating profit, representing 38.8% of revenue, grew 9% year
over year to €1.96 billion in the quarter.
Exiting the year, the company had an operating cash flow of
€3.65 billion, declining 3% year over year, due to increased
working capital requirements. Cash and cash equivalents was down
50% year over year.
Concurrent with the earnings release, management provided
guidance full year 2013.
The company expects full year 2013 software & cloud
subscriptions revenue to increase in the range of 14% - 20% at
constant currencies. The full year 2013 cloud subscription and
support revenue is expected to be around €750 million at constant
The company expects full-year 2013 non-IFRS software and
software-related service revenue to increase in the range of 11%
- 13% at constant currencies. While, operating profit for the
full year is expected to be in a range of €5.85 billion to €5.95
billion at constant currencies
Although SAP has a Zacks Rank #3 (Hold), its competitors like
BMC Software Inc.
GSE Systems Inc.
) all have a Zacks Rank of #1.
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