SAP Posts Drop In Q4 Profit, Lowers 2017 Forecast

posted a 1% drop in its fourth-quarter net profit. For the period ended December 31, the company posted a net profit of EUR1.3 billion, versus a year-ago profit of EUR1.32 billion. However, analysts were expecting a profit of EUR1.26 billion. Earnings per share declined to 1.09 euros from 1.10 euros. Non-IFRS profit after tax jumped 3% to 1.564 billion euros from 1.522 billion euros. Its quarterly operating profit slipped 3% to 1.754 billion euros, while revenue surged 7% to 5.458 billion euros. Software and Support revenue increased 5% to 4.373 billion euros, while cloud subscriptions and support revenue surged to 349 million euros from 208 million euros. Software and software-related service revenue rose 8% to 4.722 billion euros. Operating margin for the fiscal year 2014 shrank 2 percentage points to 24.7% versus 26.6%. SAP now projects 2017 operating profit of EUR6.3 billion ($7.3 billion) to EUR7 billion on revenue of 21 to 22 billion euros. SAP projects 2015 non-IFRS operating profit of EUR5.6 billion to EUR5.9 billion. It expects 2020 non-IFRS operating profit of EUR8 billion to EUR9 billion. "In 2014 we delivered on our Run Simple strategy to help our customers transform their businesses. SAP's strong growth is driven by the HANA platform, the broadest cloud portfolio and the largest business network in the world," said Bill McDermott, CEO of SAP. SAP shares rose 0.03% to $67.13 in after-hours trading.