) reported third-quarter earnings per share of €0.78 ($1.03),
which increased 17.0% year over year (88 cents a share) and beat
the Zacks Consensus Estimate of 98 cents a share by 5.1%. The
company's flagship innovation SAP HANA continued to be a growth
driver along with its cloud business.
Total revenue was €4.1 billion ($5.37 billion) in the third
quarter of 2013, up 9% year over year in constant currency.
Revenues also beat the Zacks Consensus Estimate of $5.33
Software & Could Subscriptions:
This segment includes Software and Maintenance revenues.
The segment revenues in the quarter were €1.17 billion ($1.56
billion), up 13% year over year in constant currency.
The segment reported revenues of €2.2 billion ($2.9 billion), up
11% year over year (in constant currency).
Software and Software-Related Service Revenues:
This sub-segment includes Support, Subscription and other
software-related services revenues. Revenues in this segment grew
12% year over year to €3.36 billion ($4.4 billion).
Revenues by Region
The company witnessed strong growth in the EMEA region with
14% growth in non-IFRS software and cloud subscription revenues.
The growth was impressive in the light of the continued market
uncertainty in Europe and a very tough year-over-year
Growth in the top line was driven by strong double-digit
growth in the Netherlands, Switzerland and the U.K. Revenues for
the segment in Asia Pacific Japan grew 3% due to continued
macroeconomic challenges with particularly strong performance in
The Americas region reported a strong third quarter with
software and cloud subscription revenues increasing 17%
year-over-year. This increase was driven by excellent software
revenue performance in Latin America, especially Brazil and
strong cloud subscription and support revenue growth in North
Cash and Balance Sheet
Operating profit grew 15% year over year to €1.30 billion
($1.7 billion) in the quarter.
Exiting the quarter, the company's operating cash flow was
flat year over year at €3.0 billion ($4.0 billion), due to higher
working capital requirements. Cash and cash equivalents grew
31.4% year over year to €3.3 billion ($4.3 billion).
Concurrent with the earnings release, management reiterated
guidance for full year 2013.
The company expects full year 2013 software & cloud
subscriptions revenues to increase in the range of 14% - 20% at
constant currencies. The full-year 2013 cloud subscription and
support revenues are expected to be around €750 million at
The company expects full-year 2013 non-IFRS software and
software-related service revenues to increase 10% as against 11%
- 13% growth mentioned earlier. Operating profit for the full
year is expected to be in the range of €5.85 billion to €5.95
billion at constant currencies. SAP HANA software revenue is
expected in the range of €650 million to €700 million.
While SAP has a Zacks Rank #3 (Hold), some other players in
the same industry such as
) have a Zacks Rank of #1 (Strong Buy). Another company
Concur Technologies Inc.
) is also worth considering and carries a Zacks Rank #2
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