SAP's stock dropped more than 10% on Thursday as the business software vendor warned of lower-than-expected revenue growth for its most recent, fourth quarter (Q4).
Just three months ago, SAP reported that demand for its products was growing at a breakneck pace, and the company predicted that it would report software revenue growth somewhere between 15% and 17% for 2006. Yesterday, however, it warned that this number would be closer to 13.5%.
Q4 revenue is expected to be about €2.95 billion (£1.97bn), a year-over-year increase of 7%. Software revenue was up 7 percent for the quarter, totalling about €1.26 billion, the company said.
SAP reported software sales slowed in the Americas and Asia-Pacific regions. In the US and Japan, sales dropped to a 4% growth rate during Q4. The enterprise software vendor reported 13% revenue growth in the Europe, Middle East, and Africa region.
SAP is expected to provide guidance for 2007's outlook and announce detailed fourth-quarter 2006 results on 24 January.
SAP's shares on the New York Stock Exchange closed at $48.50 Thursday, down more than 10% from the previous day's $54.13 close.
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