SAP announced preliminary quarterly results last week, warning revenue would fall short of analysts’ predictions.
The enterprise software firm said on January 11 it anticipated fiscal fourth quarter revenue of around US$3.8 billion, a 7% increase on a year ago, but only half as much as analysts had forecast.
For its full 2006 fiscal year SAP said it expected sales of US$12.19 billion, an 11% increase on 2005.
Of particular concern was the slow growth in SAP’s licence sales, which give a good indication of future service and maintenance revenue.
In Q4 the company said it made US$1.63 billion from licence sales, below the US$1.74 billion average analysts had forecast.
SAP’s lower than expected results, coupled with a difficult fiscal third quarter for rival Oracle, have sparked speculation of a slowdown in software spending.
“We believe the competitive environment is getting tougher,” Cowen & Co analyst Peter Goldmacher said in a research note.
Follow us on
