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Germany-based enterprise software giant SAP (NYSE:SAP) reported first-quarter results early this morning. The stock fell more than 3% on the German Xetra exchange, and American depositary receipts are following suit in pre-market trading.

SAP's adjusted earnings fell 3% year over year, landing at $0.78 per share. Total revenue increased 3% to $5.1 billion. U.S. analysts expected earnings of $0.80 per share on $5.3 billion in sales, so SAP whiffed on both the top and bottom lines.

The miss was largely a result of unfavorable currency effects, according to SAP's management. Cloud service subscriptions grew 38% at constant currencies but only 32% as reported. Software and support sales would have seen 7% growth rather than 2% if currencies had stayed flat.

"Constant currencies" was a common theme in this report. On that basis, software sales more than doubled year-over-year in growth markets like Venezuela and Colombia. Sales in Japan fell short of internal projections but double-digit sales growth in China "demonstrates the success of SAP's long term commitment and growth strategy for China," according to SAP press materials.

Co-CEOs Jim Hagemann Snabe and Bill McDermott preferred to talk about the shift to cloud-based services. "We are well on our way to becoming THE cloud company powered by SAP HANA with fast growth in the cloud and broad adoption of HANA as the real-time business platform," they said in a prepared statement.

Looking ahead, SAP reiterated its existing top-to-bottom outlook for fiscal year 2014 -- at constant currencies. However, currency exchange effects are expected to continue putting pressure on SAP's reported sales and earnings throughout 2014.


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