SAP SE reports a 4% decline in sales in the third quarter compared to the previous year.
The German multinational company reported a 1% year-on-year decline in operating profit.
The manufacturer of business software has lowered its forecast for the full year due to COVID-19.
SAP SE (ETR: SAP) said late Sunday that its revenue and profit for the quarter ended September 30 was lower than expected. The company attributed the decline to the ongoing coronavirus pandemic, which has weighed on demand in recent months.
The company’s shares opened on Monday with a price drop of almost 20% on the stock exchange. SAP SE has now fallen by more than 15% in the year to date. It is now trading at £92.51 per share, down from a low of £82.59 per share in March when the impact of COVID-19 peaked. Confused about choosing a reliable stockbroker for online trading? Here is a comparison of the few leading brokers to help you make your choice.
SAP’s sales of software and cloud services are down 2%.
SAP SE reported revenue of £5.92 billion in the third quarter, down 4% from the same quarter last year. In terms of operating profit, the business software company reported an annualized decline of 1% to £1.87 billion in the third quarter.
The German multinational also highlighted that it generated £1.79 billion in cloud revenue, representing 10% growth on an annualised basis. Revenue from software and cloud services combined was £4.98 billion or 2% down on the previous year.
The Walldorf-based company said this in a statement on Sunday:
“Blocks have been reintroduced in some regions, the recovery is uneven and companies are facing greater business uncertainty. As a result, larger projects are being scrutinized more closely. Transaction revenues continue to be impacted, particularly at SAP Concur, where business travel revenues have not yet recovered significantly,” the company said in a statement on Sunday.
SAP lowers forecast for annual revenue and profit
Referring to the uncertainty of COVID-19, SAP also lowered its forecasts for annual revenue and profit. It now forecasts an operating profit of £7.69 billion on an adjusted basis and up to £25.16 billion in revenue for the full year. By comparison, the previous estimate was £7.87 billion for adjusted operating profit and £25.79 billion for revenue.
In early October, SAP announced plans to acquire Emarsys. Emarsys is a cloud-based marketing company based in Vienna. It employs over 800 people and has a customer base of around 1,500.
At the time of writing this article, the German multinational software group now has a market capitalization of £112.89 billion and a price-earnings ratio of 26.75.