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SAP SE (SAP) to Report Q2 Earnings: What's in the Offing?
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SAP SE (SAP - Free Report) is expected to report second-quarter 2018 results before the opening bell on Jul 19. Notably, the company has a positive record of earnings surprises in the trailing four quarters, with an average beat of 6.1%. In the last reported quarter, the company delivered a positive earnings surprise of 3.5%.
In the last reported quarter, SAP reported IFRS earnings per share of €0.59 (71 cents), reflecting a surge of 37% on a year-over-year basis. The year-over-year improvement can primarily be attributed to a notable increase in operating profit. However, the bottom line fell short of the Zacks Consensus Estimate of 87 cents per share.
Total revenues, on IFRS basis, for the quarter were €5.26 billion ($6.42 billion), almost flat year over year and also missed the Zacks Consensus Estimate of $6.51 billion. A flourishing cloud business, along with strong growth of support revenues, aided top-line growth during the quarter.
What to Expect?
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.18 per share, indicating an increase of 14.6% on a year-over-year basis. Revenues are estimated to be around $7.11 billion, indicating a rise of 11.8% from the year-ago quarter.
Let's see how things are shaping up for this announcement.
Factor Likely to Impact Q2 Results
SAP’s human capital management (‘‘HCM’’) applications continue to boost the top line, including the likes of SuccessFactors and SAP Fieldglass. SAP SuccessFactors Employee Central had above 2,400 customers with prominent names like CaixaBank, Reckitt Benckiser Group plc and HiPP among others.
Additionally, continued market traction of the SAP S/4HANA platform is proving to be a sturdy profit churner. During the reported quarter, S/4HANA adoption surged 43% from the year-ago quarter to 8,300 customers.
This apart, SAP’s business networks (which it manages through three main players, namely Ariba, Fieldglass and Concur) increased 16% during the last reported quarter. SAP's Business Network Solutions added Migros and Ralph Lauren to its clientele, which is another positive.
Recently, the company concluded the acquisition of Callidus Software. The buyout not only gives SAP access to new sales analytic and customer engagement tools but also bolsters its foothold in $46 billion cloud-based customer relationship management (“CRM”) market.
SAP anticipates the deal to be neutral to its non-IFRS earnings for 2018 and accretive to 2019 non-IFRS earnings.
The company plans to consolidate its vibrant SAP Hybris cloud portfolio, part of its Cloud Business Group with CallidusCloud product assets. With the buyout of Callidus, SAP will boost its strength in front-office and back-office software, consequently increasing operational efficiencies.
Meanwhile, there is an inherent seasonality in technology spending on part of clients, exposing the company’s sales to risks of quarterly fluctuations. Further, rising operating expenses and competition from peers adds to SAP's concerns.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
SAP has a Zacks Rank #3 and an Earnings ESP of 0.00%. This indicates that the company is unlikely to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks, which you may consider as our model shows that it has the right combination of elements to post an earnings beat in its upcoming release:
International Business Machines Corporation (IBM - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3.
Skyworks Solutions, Inc. (SWKS - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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SAP SE (SAP) to Report Q2 Earnings: What's in the Offing?
SAP SE (SAP - Free Report) is expected to report second-quarter 2018 results before the opening bell on Jul 19. Notably, the company has a positive record of earnings surprises in the trailing four quarters, with an average beat of 6.1%. In the last reported quarter, the company delivered a positive earnings surprise of 3.5%.
In the last reported quarter, SAP reported IFRS earnings per share of €0.59 (71 cents), reflecting a surge of 37% on a year-over-year basis. The year-over-year improvement can primarily be attributed to a notable increase in operating profit. However, the bottom line fell short of the Zacks Consensus Estimate of 87 cents per share.
Total revenues, on IFRS basis, for the quarter were €5.26 billion ($6.42 billion), almost flat year over year and also missed the Zacks Consensus Estimate of $6.51 billion. A flourishing cloud business, along with strong growth of support revenues, aided top-line growth during the quarter.
What to Expect?
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.18 per share, indicating an increase of 14.6% on a year-over-year basis. Revenues are estimated to be around $7.11 billion, indicating a rise of 11.8% from the year-ago quarter.
Let's see how things are shaping up for this announcement.
Factor Likely to Impact Q2 Results
SAP’s human capital management (‘‘HCM’’) applications continue to boost the top line, including the likes of SuccessFactors and SAP Fieldglass. SAP SuccessFactors Employee Central had above 2,400 customers with prominent names like CaixaBank, Reckitt Benckiser Group plc and HiPP among others.
Additionally, continued market traction of the SAP S/4HANA platform is proving to be a sturdy profit churner. During the reported quarter, S/4HANA adoption surged 43% from the year-ago quarter to 8,300 customers.
This apart, SAP’s business networks (which it manages through three main players, namely Ariba, Fieldglass and Concur) increased 16% during the last reported quarter. SAP's Business Network Solutions added Migros and Ralph Lauren to its clientele, which is another positive.
Recently, the company concluded the acquisition of Callidus Software. The buyout not only gives SAP access to new sales analytic and customer engagement tools but also bolsters its foothold in $46 billion cloud-based customer relationship management (“CRM”) market.
SAP anticipates the deal to be neutral to its non-IFRS earnings for 2018 and accretive to 2019 non-IFRS earnings.
The company plans to consolidate its vibrant SAP Hybris cloud portfolio, part of its Cloud Business Group with CallidusCloud product assets. With the buyout of Callidus, SAP will boost its strength in front-office and back-office software, consequently increasing operational efficiencies.
Meanwhile, there is an inherent seasonality in technology spending on part of clients, exposing the company’s sales to risks of quarterly fluctuations. Further, rising operating expenses and competition from peers adds to SAP's concerns.
SAP SE Price and EPS Surprise
SAP SE Price and EPS Surprise | SAP SE Quote
What the Zacks Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
SAP has a Zacks Rank #3 and an Earnings ESP of 0.00%. This indicates that the company is unlikely to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks, which you may consider as our model shows that it has the right combination of elements to post an earnings beat in its upcoming release:
Advanced Micro Devices, Inc. (AMD - Free Report) has an Earnings ESP of +1.10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
International Business Machines Corporation (IBM - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3.
Skyworks Solutions, Inc. (SWKS - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>