SAP Earnings Beat Forecasts on Gains by HANA, SuccessFactors

SAP previewed second-quarter earnings results, showing double-digit growth in revenue based on strong sales of its HANA database products and "synergy" with the company’s 2011 SuccessFactors acquisition.

Enterprise software vendor SAP announced pre-released second-quarter financial numbers July 12, showing a 7 percent profit increase, to $1.12 billion, on an 18 percent jump in revenue, to $4.8 billion, compared with the year-ago quarter.

Company officials based the solid numbers in part on a strong showing for its HANA in-memory data analytics software.

The results exceeded the estimates of financial analysts who follow SAP. Based on non-IFRS (or non-International Financial Reporting Standards) measures, SAP€™s earnings per share were $1.12 on $4.8 billion in revenue, versus analysts€™ estimates of $1.05 EPS on $4.05 billion in revenue.

Revenue for software sales alone rose by 26 percent to $1.3 billion, from $1.03 billion in the second quarter of 2011. The German-based SAP noted that this was the first quarter in which its software revenue topped the 1 billion euro mark.

SAP noted in a statement that its HANA database business €œhad an outstanding quarter,€ with significant deals in all geographic regions for the quarter ended June 30. The HANA platform of SAP software running on partner hardware is designed to do data analytics faster because data is stored in server memory rather than retrieved from disk storage, which takes longer.

SAP also noted sales growth due to synergies between SAP and SuccessFactors, a company it acquired in late 2011 for $3.84 billion, which handles key business functions in the cloud, including human resources, finance, payroll and supply-chain management. However, expenses associated with the acquisition reduced SAP€™s operating margin in the quarter by 2.4 percentage points to 23.6 percent from the year-ago quarter.

For the first half of 2012, SAP reported an operating profit of $1.9 billion, up 7 percent from the first half of 2011, on revenue of $8.9 billion, up 15 percent from last year. Software revenue alone rose by 17 percent, to $2.08 billion.

These results are preliminary and unaudited; SAP will report complete results July 24.