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SAP issues profit warning
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October 13, 1999: 4:27 a.m. ET
Shares of German software firm slump 10% as it warns on '99 sales and profits
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LONDON (CNNfn) - German business software maker SAP Wednesday warned that sales and profits for this year won't meet previous estimates, sending its shares nosediving about 10 percent.
"Following the preliminary analysis of third quarter results, SAP's board is no longer maintaining its forecast of an increase in revenue of 20 to 25 percent and improved pre-tax profit margin of up to 1 percent," the Walldorf-based company said in a short statement.
SAP said it now expected total revenue growth of 15 to 20 percent, after third quarter revenue grew by only 7 percent. But the group warned that would remain dependent on the continued strength of current trading conditions.
"This analysis is chiefly based on the continuously strong fourth quarter sales pipeline and the increasingly positive responses among customers to the Internet product mySAP.com, launched in September in the U.S.," SAP said.
SAP promised more information when it announces its third quarter earnings on Oct. 20.
The stock fell as low as 398 euros in early morning trade in Frankfurt, a five-week low. The shares fell 5 percent Tuesday.
The group's shares are traditionally volatile but SAP was forced to make the statement after a more than 12 percent plunge in recent sessions.
The warning comes less than two weeks after Europe's other major technology stock, CAP Gemini, warned its sales outlook remained sluggish.
Shares of European software and management consultants have suffered in recent months amid worries about a slowdown in new Y2K contracts as the millennium approaches.
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SAP
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