SAP Posts Solid Fourth Quarter - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

SAP Posts Solid Fourth Quarter

Buoyed by one of its strongest quarters in more than a year, SAP today posted healthy fourth-quarter gains in sales and earnings. The company also reported an 18% increase in sales for the year--a far cry from its glory days, but solid enough to indicate that the applications vendor is emerging from the darkness of the enterprise resource planning market slowdown.

For the fourth quarter, the company reported revenue of $1.7 billion (1.65 billion euros), a 30% increase over the year-ago period. Profits for the quarter jumped 109% to $322 million (317 million euros) over last year.

SAP's product revenue was up 43% in the fourth quarter of 1998. MySAP.com products, the centerpiece of SAP's Internet strategy, accounted for $131 million (129 million euros) in license sales--most of that closing in December.

After the vendor's rough third quarter, analysts had been "cautiously optimistic" that the company would rebound. "But we didn't expect them to rebound the way they did," says Mike Bittner, research director at AMR Research. Both quarter and year-end numbers were higher than expected.

Despite the company's difficulties in 1999, SAP managed sales for the year of $5.2 billion (5.11 billion euros), an 18% jump over the previous year. Net income was up 14% over the previous year to $611 million (602 million euros).

The company indicated that its fourth quarter wasn't an aberration but an indicator of things to come, saying it expects to double its 1998 revenue by 2001--a claim AMR views with skepticism. In the year ahead, SAP says product revenue will grow faster than service revenue, which will lead to an improved operating margin. However, for the first quarter, the company will invest significantly in marketing and personnel for mySAP.com, which will make cost growth a few percentage points higher than revenue growth.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Commentary
Study Proposes 5 Primary Traits of Innovation Leaders
Joao-Pierre S. Ruth, Senior Writer,  11/8/2019
Slideshows
Top-Paying U.S. Cities for Data Scientists and Data Analysts
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/5/2019
Slideshows
10 Strategic Technology Trends for 2020
Jessica Davis, Senior Editor, Enterprise Apps,  11/1/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll