By Harro Ten Wolde
FRANKFURT (Reuters) – German software maker SAP Enterprise reported a quarterly profit at the lower end of forecasts due to weak sales of its traditional software unit, following the rapid change of customers cloud programs, lower margin.
Just like established rivals like Oracle, IBM and Microsoft, SAP tries to boost sales by Internet to contain new competitors growing rapidly as Workday and software unit via Amazon.com website.
Although this software is less profitable in the short term, suppliers expect higher earnings over time from subscription payments.
SAP, the largest software maker in Europe, He said Tuesday its second-quarter earnings jumped 20 percent to 4,970 million euros, or 8 percent excluding exchange rate variations, because the cloud software sales increased by more than double.
That exceeded the range of analyst forecasts sales of between 4,810 million and 4,960 million euros.
But the traditional software sales of higher margin rose only 2 percent, less than the expected increase of 6.6 percent, given the weakness in emerging markets, particularly in Latin America.
SAP, whose customers include some of the largest multinationals in the world, specializing in business applications, from accounting and human resources to supply chain management.
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