17% drop in SAP's operating profit is a worry for investors German technology firm SAP saw its sales jump to a record high last year, bolstering its position as Europe's biggest business software manufacturer. But a drop in operating profit has disappointed investors .Revenue from SAP software and software-related services grew 14 percent in 2012 to reach a total of €16.2bn ($21.6bn), the German business software manufacturer announced Tuesday.
In terms of revenue, 2012 was the best-ever year in company history, SAP said, noting that its strategy to expand into so-called cloud-based business solutions and database technology was proving successful.
However, operating profit dropped 17 percent to €4.1bn, the Waldorf-based company disclosed, as investments in sales and distribution, as well as in the takeover of business commerce network Ariba, weighed heavily on profits.
"The figures are not bad, but they miss the consensus forecast," an analyst at the Frankfurt Stock Exchange told Reuters news agency, after SAP shares had dropped about 4 percent on Tuesday.
Meanwhile, SAP founder Hasso Plattner no longer sees Europe's biggest software manufacturer as an easy target for hostile takeover bids.
"We've clearly grown out of being the speculative stock we were a few years ago," Plattner told the German business daily "Handelsblatt."
Plattner said he was convinced SAP would soon break the 100-billion euro mark in terms of stock market value, after doubling its value in the past three years to a current €97bn.
In the past, the only major German software firm was considered an easy takeover target for global software giants such as Microsoft or IBM. However, the firm is now racing neck-and-neck with US rivals Oracle for the global leadership in business software.
Source: Deutsche Welle