A grim worldwide economy has turned the software maker SAP awfully quiet. The company on Monday tried to erase an earlier fiscal-year revenue forecast from investors’ minds, saying it would no longer release predictions to investors about its current year or 2009 due to widespread “uncertainties.”
The forecast rumblings arrived alongside depressed third-quarter results. SAP witnessed a 5 percent year-over-year drop in net income, to 388 million euros ($486 million) from 408 million euros, including charges related to the acquisition of Business Objects.
Total revenue, including software sales and services, rose 14 percent to 2.76 billion euros from 2.42 billion in the same period last year.
The effect of the earnings announcement was muted since SAP revealed preliminary figures earlier in the month. At the time, it warned that worsening economic conditions were starting to make life difficult in the business software market.
SAP continues to send much the same message.
“The third quarter 2008 was SAP’s 19th consecutive quarter of double-digit growth in software and software-related service revenues at constant currencies,” said Henning Kagermann, the co-chief executive at SAP. “This was an achievement in a period where the global financial crisis had a significant impact on customer decisions towards quarter end.”
Back in July, SAP predicted that software and related services revenue would rise between 24 percent and 27 percent in 2008. As mentioned, however, it will “no longer provide a specific outlook” for sales this year or next.
Word of SAP’s nervousness about the coming months was followed by a number of analyst notes that took a more pessimistic look at the software sector overall.
For example, Citigroup cut its estimates on Oracle to “reflect a recessionary environment and significant foreign currency headwinds.” Its fiscal 2009 earnings per share forecast dropped four cents to $1.48, which would still mark a 14 percent year-over-year increase for Oracle.
Both SAP and Oracle are often used as barometers for spending on business technology.
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