SAP’s Cloudy Future Prompts a Dip in Profit Forecast

Cloud & Services IT Asset Management News | 0 comments

by | January 21, 2015


German software giant SAP has cut its profit margin forecast for 2017, as its cloud offering is set to take off and dent the company’s (still-bulging) pockets.

According to its results today, Tuesday, by 2017 operating profit will be around €6.3bn-€7bn (£4.8bn-£5.3bn) on revenue of €21bn-€22bn (£16bn-£17bn).

This is down from the previous forecast of an operating profit of €7.7bn (£5.8bn) on revenue of €22bn (£17bn).

Overall operating profit fell by three per cent to €4.3bn (£3.3bn) for the full-year 2014, on revenue up four per cent to €17.6bn (£13.4bn) compared with the same period in 2013.

During that period, cloud-based income increased by 45 per cent to €1.1bn (£800m), it said. However, income from software and software-related services still contributed toward the lion’s share of revenue, growing seven per cent to €14.9bn (£11.4bn).

Luka Mucic, chief financial officer at SAP, said the company has also built a pipeline of €3bn (£2.3bn) in cloud revenue for the year.

SOURCE: theregister.co.uk

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