The 10-second takeaway
For the quarter ended Dec. 31 (Q4), SAP met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share dropped.
Margins shrank across the board.
SAP reported revenue of $6.62 billion. The 22 analysts polled by S&P Capital IQ predicted revenue of $6.71 billion on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $5.85 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 $1.51. The 10 earnings estimates compiled by S&P Capital IQ anticipated $1.54 per share. GAAP EPS of $1.21 for Q4 were 7.6% lower than the prior-year quarter's $1.31 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 72.8%, 260 basis points worse than the prior-year quarter. Operating margin was 31.7%, 740 basis points worse than the prior-year quarter. Net margin was 22.0%, 460 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $5.13 billion. On the bottom line, the average EPS estimate is $0.76.
Next year's average estimate for revenue is $24.17 billion. The average EPS estimate is $4.56.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 340 members out of 390 rating the stock outperform, and 50 members rating it underperform. Among 112 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 98 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 hold, with an average price target of $73.96.
Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not SAP makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add SAP to My Watchlist.
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. The Motley Fool has no position in any of the stocks mentioned. 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.