SAP reported Q1 net income increased 10% to €310 million ($422m), or €0.26/share, compared to analysts' average estimates of €309m (Thomson) to €320m (Bloomberg). Sales rose 6.1% to €2.17b, short of analysts' average estimate of €2.23b (Bloomberg). SAP reiterated '07 operating profit margin guidance of 26% - 27% (vs. 27.3% in '06) and said it sees software and related services sales rising 12% - 14%. Q1 operating profit margin was flat at 20%. SAP reported its market share of business-management software increased to 25.1% for the year-ended Mar. 31, compared to 24.5% on Dec. 31. SAP's ADRs lost 0.34% to $49.18 in normal trading yesterday and were up a penny in the after-hours on volume of 291,000 shares in what appears to be a large block trade. SAP's ordinary shares were up as much as 3% to €37.17 this morning in Frankfurt.
Sources: Press release, Bloomberg, MarketWatch
Commentary: Is SAP Gaining or Losing Market Share? • SAP: Putting Its Customers Ahead Of Its Stock Price • SAP Post-Agassi: Under The Microscope • SAP Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: SAP AG (SAG). Competitors: Oracle (ORCL), Microsoft (MSFT), International Business Machines (IBM). ETFs: Software HOLDRs (SWH), Vanguard Information Technology (VGT), iShares MSCI Germany Index (EWG)
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