SAP soars on Net sales
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January 7, 2000: 6:43 a.m. ET
German business software leader rebounds after strong 4Q performance
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LONDON (CNNfn) - SAP, Europe’s largest business software publisher, reported strong fourth quarter sales Friday to spark a surge in its stock and boost the region’s flagging technology shares.
SAP rebounded from a third-quarter profits warning to report that pre-tax earnings had doubled in the last three months of the year.
Revenue from software licenses surged 40 percent to 800 million euros in the quarter while total sales climbed 25 percent, well ahead of analysts’ forecasts.
"This is phenomenal growth,” said Devika Malik, sector analyst at JP Morgan in London.
SAP shares surged more than 10 percent to peak at 600 euros in Frankfurt.
The company’s stock has flagged since its October comments on third-quarter profit and suffered again this week when Dutch rival Baan issued a profit warning accompanied by the resignation of its chief executive.
However, analysts said SAP’s strategy of investing heavily in its Internet portal, mySAP.com, was now paying off. "They wouldn’t have been able to achieve these growth rates without some contribution from mySAP,” said Mailik.
SAP specializes in so-called enterprise solution software, which drives internal corporate systems such as payroll and personnel management. Companies are increasingly downloading such software as required from the Net rather than buying off-the-shelf solutions.
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