The 10-second takeaway
For the quarter ended Sep. 30 (Q3), SAP beat expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share dropped significantly.
Margins shrank across the board.
SAP booked revenue of $5.10 billion. The 25 analysts polled by S&P Capital IQ expected revenue of $4.98 billion on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $4.58 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 $0.91. The 11 earnings estimates compiled by S&P Capital IQ anticipated $0.94 per share. GAAP EPS of $0.67 for Q3 were 52% lower than the prior-year quarter's $1.41 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 68.2%, 330 basis points worse than the prior-year quarter. Operating margin was 23.6%, 1,000 basis points worse than the prior-year quarter. Net margin was 15.6%, 2,110 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $6.56 billion. On the bottom line, the average EPS estimate is $1.51.
Next year's average estimate for revenue is $20.93 billion. The average EPS estimate is $3.95.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 338 members out of 385 rating the stock outperform, and 47 members rating it underperform. Among 104 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 90 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 $64.18.
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