SAP hits Q4 target after a tough year

SAP reports good 4Q results

SAP has reported Q4 results in line with expectations following a tough year that saw the company underperform in Q2 and Q3.

Expectations were lowered in Q4 to reflect the difficult market.

Revenue from software and software-related services were down 28 per cent to €2.48bn year on year, with total revenue down eight per cent to 10.7 per cent.

The fourth quarter accounts for 40 per cent of SAPs annual revenue and the fact that its results met expectations bodes well for the company particularly after it missed its fourth quarter forecast last year to the disappointment of analysts.

Research director at Gartner Thomas Otter said that the Q4 results bring the company in line with the rest of the market, and that SAP seemed to be recovering from setbacks during the year including maintenance pricing which it has now reduced from 22 per cent to 18 per cent and a paucity of big software deals owing to the difficult economic climate.

Deutsche Bank has recently signed a letter of intent with SAP again perhaps signifying an upswing for the company.

Otter argues that the most interesting element of SAP's results are its forecasts for 2010 of key sales growth of between 4 and 8 per cent, and an operating margin rising to 30-31 per cent for the year. The increased operating margin will be aided by cost cutting measures implemented across the business in 2009.

Despite these forecasts Otter said: "Just because SAP gave competent Q4 results, doesn't mean the company is out of the woods yet."