The 10-second takeaway
For the quarter ended March 31 (Q1), SAP met expectations on revenue and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue improved and GAAP earnings per share increased.
Gross margin grew, operating margin dropped, and net margin was steady.
SAP chalked up revenue of $4.47 billion. The 23 analysts polled by S&P Capital IQ hoped for a top line of $4.50 billion on the same basis. GAAP reported sales were 4.1% higher than the prior-year quarter's $4.29 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.65. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.66 per share on the same basis. GAAP EPS of $0.49 for Q1 were 2.1% higher than the prior-year quarter's $0.48 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 65.3%, 70 basis points better than the prior-year quarter. Operating margin was 18.6%, 120 basis points worse than the prior-year quarter. Net margin was 13.3%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $4.97 billion. On the bottom line, the average EPS estimate is $0.88.
Next year's average estimate for revenue is $20.97 billion. The average EPS estimate is $4.01.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 332 members out of 377 rating the stock outperform, and 45 members rating it underperform. Among 104 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 93 give SAP a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SAP is hold, with an average price target of $66.00.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.