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SAP Beat Analysts’ Estimates in Fiscal 4Q15

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Jan. 25 2016, Updated 5:35 a.m. ET

SAP’s fiscal 4Q15 results beat analysts’ estimates

As we highlighted in our recent series on IBM’s (IBM) fiscal 4Q15 pre-earnings, the earning season has started. Citrix (CTXS), SanDisk (SNDK), and Microsoft (MSFT) are some of the technology companies that will be announcing their fiscal results later in January 2016. SAP (SAP) will announce its fiscal 4Q15 results on January 22, 2016.

On January 11, 2016, SAP reported preliminary revenue of 6.4 billion euros and non-IFRS (International Financial Reporting Standards) operating profit of 2.3 billion euros. SAP’s fiscal 4Q15 results managed to beat analysts’ estimates on both fronts. Analysts’ expected SAP to report revenue and operating profit of 6.04 billion euros and 2.3 billion euros, respectively. The company didn’t disclose information about the EPS (earnings per share).

[marketrealist-chart id=963167]

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Strong US dollar boosted SAP’s fiscal 4Q15 revenue

In fiscal 4Q15, SAP’s revenue of 6.4 billion euros grew 16% on a YoY (year-over-year) basis. In constant currency terms, the growth was only 11%. This shows that currency fluctuations played a substantial role in SAP’s results. Unlike its peers, SAP is a technology company that actually got a boost from the strong US dollar compared to major currencies. The company reports its revenue and profits in the euro (EWG). In 2015, the euro fell to a 12-year low against the US dollar. As you can see in the above chart, a stronger dollar-to-euro exchange in 2015 ensured cheaper exports for SAP.

SAP’s IFRS operating profit stood at 1.70 billion euros—a fall of 3% on a YoY basis. SAP’s non-IFRS operating profit stood at 2.3 billion euros—an increase of 7% on a YoY basis. For full-year 2015, the non-IFRS operating profit stood at 6.4 billion euros—an increase of 16% on a YoY basis.

Later in this series, we’ll discuss the factors that helped SAP report growth in its revenue and operating profits. We’ll also discuss its optimistic guidance for 2016.

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