SAP Reports Disappointing Preliminary Q4 2006 Numbers

By Renee Boucher Ferguson  |  Posted 2007-01-12 Print this article Print

Analysts point to lackluster U.S. currency rate rather than competition from Oracle as the culprit.

SAP AG announced late in the afternoon Jan. 11 that it will miss not only analysts' consensus estimates of its fourth quarter and full year 2006 revenues—earnings per share came in above estimates—but its own estimates as well.

While the missed numbers for the quarter don't bode well for SAP in the short run, some analysts believe they might be indicative of an overall slowdown of business application sales—particularly in U.S. markets where the dollar is weak compared to the euro, and where SAP slipped two out of four quarters in 2006.

And while SAP's disappointing fourth quarter will surely give Oracle fodder to crow—Oracle spends more time in its earnings call downplaying SAP than it does talking about its own strategy—there are indications that Oracle is seeing a similar slowdown in application sales.

The overall consensus: SAP's woes seem to be more about a lackluster U.S. currency compared to the euro than about encroaching competition from Oracle. The real results, however, remain to be seen.

Charles Di Bona, an analyst with Sanford Bernstein, pointed out in a research note released Jan. 12 that Oracle, in its last earnings announcement in December, also fell short of expectations.

Read the full story on eWEEK.com: SAP Reports Disappointing Preliminary Q4 2006 Numbers.


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