SAP misses on profits

But business applications giant hails "outstanding" year

SAP has missed its quarterly profit targets after investment in innovation and expansion activities left their mark on the business application vendor's bottom line.

The Germany-based goliath fell short of Wall Street expectations as it posted an operating profit of €1.96bn (£1.63bn) for its fiscal fourth quarter, sparking a 4.6 per cent fall in its share price.

SAP claimed that "continued investments in key innovations as well as the expansion of [its] global go-to-market activities" are to blame.

In Q4, which ended on 31 December, SAP saw its total non-IFRS sales grow 12 per cent to €5.06bn, short of an average analyst forecast of €5.17bn.

Its non-IFRS cloud subscriptions and support revenue rocketed by 1,717 per cent to €342m in its FY12, while its software sales grew by 10 per cent to €4.66bn over the same period.

SAP's co-chief executives Bill McDermott and Jim Hagemann Snabe said 2012 was a record year for the vendor, despite falling short of market targets.

"2012 was an outstanding year where we set many new records. We continued our double-digit growth momentum and exceeded our revenue guidance," they added.

"We achieved a breakthrough in the cloud and today SAP is the second-largest cloud player in the world. And we overachieved on our SAP HANA revenue ambition, making SAP the fastest-growing next-generation database company in the market."

All figures are preliminary and unaudited.