SAP Sparks Fear
The unexpected miss provoked a selloff of SAP shares; in recent trading the stock was off $3.19, or 6.3%, to $47.15. Most software issues were down as well, though the bulk of those losses were much smaller.
Despite the poor second quarter, the company reaffirmed guidance for the rest of the year. CEO Henning Kagermann said the miss does not signal an industry-wide slowdown, and said on a conference call that a number of deals that were expected to close at the end of the quarter slipped. "The good news is we have not lost deals, the order entry is extremely strong and the pipeline is strong, so that's why we could reaffirm our guidance," he said on a conference call after the announcement.
The major culprit in the second-quarter miss, announced a week before final results will be released, was weaker-than-expected sales of new software licenses. The company said those sales rose 8% to 621 million euros ($790 million), missing all estimates in a Reuters poll of 24 analysts, whose forecasts averaged 675 million euros.Not only did the company miss on licenses, Kagermann admitted that SAP lost share to "our peer group," meaning Microsoft
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