SAP: share up with good start to year in cloud

(CercleFinance.com) - SAP shares are one of the biggest risers on the pan-European STOXX 600 index on Tuesday morning, following the announcement of better-than-expected growth in cloud sales in Q1.


An hour into trading, the share of Europe's leading software company was up almost 4%, returning towards its all-time highs, leaving the DAX way behind (+0.7%).

SAP last night reported strong growth in cloud sales and order intake for Q1.

Over January-March, cloud sales growth reached 25% at constant exchange rates, while its order backlog grew 28%.

Stifel says that these "solid" performances are likely to reassure investors that the technology giant is on track for solid growth over the coming quarters, despite the difficult economic climate.

However, the group posted an operating loss of E0.8bn under IFRS, due to a provision of E2.2bn relating to its ongoing restructuring, which is set to affect 8,000 positions.

It's true that profitability is a little 'tight' this quarter, but from a structural point of view everything seems to be on track, Barclays said.

SAP has also confirmed its forecasts, with annual cloud sales still expected between E17bn to E17.3bn, representing growth of between 24% and 27% at constant exchange rates.

Operating profit is expected to come in between E7.6bn and E7.9bn this year on a non-IFRS basis, representing growth of between 17% and 21% at constant exchange rates.


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