SAP SE (SAP) - Get Report shares traded near the bottom of the German market Tuesday after the business software group, a key rival to the likes of Oracle (ORCL) - Get Report and Microsoft (MSFT) - Get Report , unveiled a group-wide restructuring plan that clouded solid fourth quarter earnings.
SAP will take close to a $1 billion hit from the plans over the current quarter, the company said, as it offers early retirement and reassignment to scores of employees following a fourth quarter that showed a slowdown in cloud computing bookings but still resulted in stronger-than-expected non-IFRS earnings of €2.547 billion.
SAP also said its $8 billion purchase of U.S.-based Qualtrics International in November helped it lift 2019 revenue guidance to a range of €28.6 billion to €29.2 billion. The bulk of that, however, will come from cloud and software revenues, which SAP sees rising by between 8.5% and 10% to as high as €22.7 billion.
"In 2018, SAP hit or exceeded all guidance metrics even after multiple raises," said CEO Bill McDermott. "With Qualtrics joining SAP, we are now poised to revolutionize the business software industry with Experience Management. With a consistent track record of unprecedented growth behind us, we are leading our stakeholders forward to bridge the experience gap."
SAP shares were marked 2.65% lower by mid-day in Frankfurt, compared to a 0.21% gain for the benchmark DAX performance index, and changing hands at €89.91 each. The move extends the stock's three-month decline to around 3% and gives Europe's most valuable tech company a market cap of around €108 billion.