Restructuring to cost ~$1.0 billion

SAP SE (SAP) wants to reconfigure its business structure, a reorganization it estimates will cost up to ~$1.0 billion. The company expects to absorb much of the cost related to the restructuring in the current quarter.

SAP’s restructuring is driven by two objectives: the first is to simplify its structures and processes, and the second is to ensure that its resource allocation aligns with its strategic priorities to enable it to meet evolving customer demand.

Here’s What SAP Wants to Achieve with Its Restructuring

Company to reinvest savings

Although SAP says its restructuring plan is not about cost cutting per se, it still expects to achieve some savings. The company expects to save close to $1.0 billion annually starting in 2020 and says it will reinvest the savings in its business, particularly in strategic growth areas such as cloud services. SAP’s cloud subscriptions and support revenue jumped 32% to $5.7 billion in 2018. SAP is expecting an excess of $10 billion in cloud subscription and support revenue by 2020.

SAP’s revenue rose 9.0%

SAP generated ~$8.4 billion in revenue in the fourth quarter, a rise of 9.0% YoY (year-over-year). Revenue rose 12% YoY at Microsoft (MSFT) but fell 3.5% at IBM (IBM) in the comparable quarter. Oracle’s (ORLC) revenue was mostly flat in the first quarter of fiscal 2019, which ended in November, while Accenture’s (ACN) revenue rose 7.3% YoY in the same period.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.