The 10-second takeaway
For the quarter ended June 30 (Q2), SAP beat expectations on revenues and missed estimates on earnings per share.
Compared with the prior-year quarter, revenue expanded and GAAP earnings per share dropped.
Margins dropped across the board.
SAP logged revenue of $4.94 billion. The 22 analysts polled by S&P Capital IQ foresaw revenue of $4.82 billion on the same basis. GAAP reported sales were 3.1% higher than the prior-year quarter's $4.79 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.85. The 11 earnings estimates compiled by S&P Capital IQ anticipated $0.89 per share. GAAP EPS of $0.70 for Q2 were 1.4% lower than the prior-year quarter's $0.71 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 68.9%, 130 basis points worse than the prior-year quarter. Operating margin was 22.6%, 710 basis points worse than the prior-year quarter. Net margin was 17.0%, 80 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $4.67 billion. On the bottom line, the average EPS estimate is $0.96.
Next year's average estimate for revenue is $19.37 billion. The average EPS estimate is $3.94.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 341 members out of 386 rating the stock outperform, and 45 members rating it underperform. Among 100 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 86 give SAP a green thumbs-up, and 14 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SAP is outperform, with an average price target of $65.27.
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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 the 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 don't 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.