SAP shares tumble after sales warning
Loose lips sink ships
SAP saw its shares fall 16 per cent on Nasdaq yesterday, in a market which fell five per cent, after it warned it had seen sales fall off a cliff in the last two weeks of September.
The company said it was likely to increase revenues by 13 to 14 per cent in the third quarter of 2008 - software and software-related revenues will bring in between €1.97bn and €1.98bn.
But a warning that sales had fallen sharply in September - hardly surprising you might think - seriously spooked investors.
Henning Kagermann, Co-CEO of SAP, said: “The market developments of the past several weeks have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter.
"Throughout the third quarter we felt quite positive about our ability to meet our expectations. Unfortunately, SAP was not immune from the economic and financial crisis that has enveloped the markets in the second half of September, causing us to report numbers below our expectations."
Kagerman insisted the market fundamentals of SAP's business were sound, and that it had double-digit revenue growth and had increased market share.
SAP shares fell another 8.5 per cent in early trading in Germany Tuesday - they are down 34 per cent on the year.
SAP will report detailed results, and an outlook for 2009, on 28 October. ®
SAP=[S]tops [A]ll [P]rogress
I'll get my coat.
They have increased the cost of support by 5% and there is no way to avoid having to pay the extra - I think that might help boost their revenue figures.
Of course that doesn't take fully into account all the money that is being paid to the various consultants as well - as it was, is now, and shall be, SAP is a licence to rake in money from companies that believe in PowerPoint presentations.
So they are still making a profit then?
So what's the problem, ok, so it's less of a profit than they were expecting - well boo hoo.
As long as a company makes a profit (any profit) it can stay in business, the needless panic, cutting back on projects and automatically getting rid of staff so that shareholders and market analysts aren't disappointed is very shallow and short-term behaviour, and in the middle to long-term is very damaging to everyone.