SAP expects operating profit to remain flat

|About: SAP AG (SAP)|By:, SA News Editor

SAP (SAP) expects 2014 adjusted operating profit of €5.8-6B vs €5.9B in 2013 and consensus of €6.06B.

The company also forecasts that revenue from software and software-related services will increase 6-8% after four years of double-digit growth.

SAP has put back its profit goals by two years as part of its transition to cloud-based services from its traditional licensing model. "We choose not to harvest the margin in the short run but to go for share in the cloud," co-CEO Bill McDermott says.

SAP now expects its adjusted operating profit to reach 35% of sales by 2017 rather than by 2015. The company also predicts that sales will rise to at least €22B ($30B), with cloud revenue €3-3.5B. SAP may make acquisitions in order to hit the cloud target.

See SAP full-year earnings. (PR)