SAP's new duel Women CEOs raise 4th quarter profits by 22%
SAP, which is an Walldorf, Germany-based Business software company, reported earnings recently. It was its first results under its new leadership after their CEO Bill McDermott left the company and Jennifer Morgan and Christian Klien both took over the company in a dual CEO role. SAP has increased its earnings outlook as strong growth in the cloud-based software drove a 22% increase in the company's fourth-quarter profit, beating analysts’ estimates.
It was a tough and wild year for the company before getting it together to have a good quarter. SAP had a difficult time at first as it shifts customers away from on-site business software toward cloud-based solutions.
The company faces large competitors in the space from Amazon, Google, Microsoft, as well we other companies that are fighting for space in the industry. SAP started restructuring a year ago, letting go 4,400 people, and costing an estimated €800 million to €950 million ($882 million to $1.05 billion).
SAP on Tuesday said net profit rose to €2.18 billion in the fourth quarter up from €1.79 billion a year earlier.
Boosted by a 32% increase in cloud revenue in the fourth quarter, SAP lifted its sales outlook for 2020 around 2% to as much as €29.7 billion. It also raised its profit target to up to €9.3 billion from a previous estimate of €9.1 billion. New cloud bookings rose 17% in the quarter, as cloud revenue rose to €1.9 billion from €1.4 billion a year earlier. However, that business still trailed traditional software licenses and support, which generated €4.95 billion, up 1%.
“We have great expectations for continued efficiency gains and expansion of our profitability in 2020,” said Chief Financial Officer Luka Mucic on a conference call.