SAP AG is locked in a battle with rival Oracle for the hearts, minds and checkbooks of business-management software buyers and is also facing a difficult European macroeconomic environment, but the firm seems to be thriving. It reported its best ever fourth quarter and year Friday on a foundation of revenue and profit that surpassed analysts' expectations.
"In an uncertain environment, SAP delivered the best year in its 40-year history," Bill McDermott and Jim Hagemann Snabe, co-chief executive officers of Waldorf, Germany-based SAP (NYSE:SAP), said in a statement Friday. "We gained significant market share and achieved double-digit growth across all regions. Our innovation strategy is winning. Customers see the incredible value we deliver and recognize that SAP is the better choice."
Investors seemed to be cheered by the results, pushing shares of SAP up $1.07 to $54.32 at midday Friday.
On the other hand, investors punished Oracle (NASDAQ:ORCL) in December after it missed expectations for the second quarter of fiscal 2012. However, it should be noted that CRM was one of the few bright spots for Oracle, with 20 percent growth.
SAP said its fourth quarter 2011 performance was driven by "outstanding growth" in its core applications business, strong momentum for analytics and mobile solutions and accelerated growth for SAP HANA (its in-memory appliance for business intelligence).
SAP had targeted €100 million in software revenue for SAP HANA for 2011, but exceeded that to the tune of €160 million. SAP said its fourth quarter 2011 software revenue increased 16 percent to €1.74 billion ($2.22 billion). Analysts in a Dow Jones Newswires survey had anticipated an average of €1.63 billion in software revenue. In comparison, Oracle's software revenues only increased 2 percent.
The company also increased its adjusting operating profit by 10 percent to €1.78 billion.
"SAP achieved excellent results both on the top and bottom line, expanding our operating margin while we continued to invest in go-to-market activities to capture future growth opportunities," said Werner Brandt, chief financial officer of SAP.
SAP said it will deliver its full 2011 results on Jan. 25 along with its outlook for the current year. According to its statement, the full-year results will be the best in the company’s 40-year history.