A survey of 100
customers found many of them are pushing budgeted second-quarter spending back to the fourth quarter, while 2004 is shaping up weakly, J.P. Morgan said.
The brokerage downgraded the shares to neutral from overweight. SAP's American depositary receipts were recently down 39 cents, or 1%, to $28.83 on the Instinet premarket session.
The J.P. Morgan survey found that 23% of respondents were pushing a larger-than-expected amount of second-half spending into the fourth quarter. Regarding the just-completed quarter, the brokerage saw evidence that deferred first-quarter revenue might not materialize in the second, but nevertheless it sees no surprises in the latest period.
License revenue growth for 2004 was estimated at around 2%, meaning other estimates might be too high, J.P. Morgan said. It also said it doubted the current
M&A dance would accrue favorably to SAP's revenue line anytime soon.
"Moreover, market share gains in a declining market don't necessarily mean growth," it added.