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- Shares in SAP fell as much as 17% after the German software maker cut its business outlook for 2020, citing a slower-than-anticipated recovery for many of its key clients from the pandemic.
- Germany’s largest software maker cut its 2020 business outlook to € 27.2 to 27.8 billion ($ 32.1 to $ 32.8 billion) from a previous estimate in April of 27.8 to 28 , 5 billion euros (32.8 to 33.7 billion).
- SAP said it will now target an expansion in its cloud computing division to more than € 22 billion ($ 25.98 billion) by 2025, from € 1.984 billion ($ 2.34 billion) in the third quarter of this year.
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Shares of German software maker SAP fell more than 17% on Monday, after the company cut its outlook for 2020, citing a slower-than-expected recovery from the coronavirus pandemic for many of its key customers.
SAP, Germany’s largest software company, cut its full-year business outlook for 2020 from € 27.2 to € 27.8 billion ($ 32.1 to $ 32.8 billion) from a previous estimate in April 27.8 to 28.5 billion euros (32.8 to 33.7 billion dollars).
Shares in SAP fell as much as 21% to 98.88 euros ($ 116.7), at one point, dragging the Frankfurt DAX down 2.1%, making it the worst performing index in Europe on Monday. in the morning.
In its earnings report, released before the start of business activity, SAP reported a 4% drop in total revenue in the third quarter of the year to € 6.535 billion ($ 7.71 billion), due to a decrease in its software licensing business, which had previously been the bread and butter of the company.
SAP said it will now target an expansion in its cloud computing division to more than € 22 billion ($ 25.98 billion) by 2025, from € 1.984 billion ($ 2.34 billion) in the third quarter of this year. But this did little to encourage investors, who led the shares to their biggest loss in a day since at least 2008.
“While SAP continues to see great interest in its solutions to drive digital transformation as customers seek to emerge from the crisis with more resilience and agility, lockdowns have recently been reintroduced in some regions and the recovery in demand has been more moderate than expected “. the company said.
SAP, together with Deutsche Telekom, recently developed the Corona-Warn-App, a mobile tracking and tracing system to detect people infected with COVID-19 used by German health authorities.
Avishek Das-SOPA Images / Getty Images
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