Monday, August 31, 2015

Software woes: SAP profits 'disappointing', Oracle 'weak'

Says Janney's Kim

Software woes: SAP profits 'disappointing', Oracle 'weak'

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 FILE - In this  Jan. 23, 2013 file picture CEOs Jim Hagemann Snabe and Bill McDermott, right, pose for photographers prior to a press conference in Walldorf, southwestern Germany.  (AP Photo/dpa, Uwe Anspach, File)
FILE - In this Jan. 23, 2013 file picture CEOs Jim Hagemann Snabe and Bill McDermott, right, pose for photographers prior to a press conference in Walldorf, southwestern Germany. (AP Photo/dpa, Uwe Anspach, File)

Shares of SAP AG, the Germany-based business software giant whose US headquarters is in Newtown Square, fell more than 3%, to below $74 a share, in trading today after the company reported what Yun Kim, analyst at Janney Capital Markets in Philadelphia, called "yet another disappointing license quarter," with slow sales in Asia and North America. Sales and profitability fell below Wall Street estimates, though operating profits came in as expected due to lower costs. See SAP's new earnings report here.

"On the heels of Oracle's weak license quarter last month, many investors may conclude that the overall spending environment remains challenging" for big software companies, Kim added. Yet he's still holding out for a belated return to big corporate systems spending, and increased sales for SAP's HANA database business. Indeed, under current conditions, Kim tells clients SAP stock is worth buying until it reaches $90 a share.

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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