SAP stock dropped more than 10 per cent yesterday as the business software vendor warned of lower-than-expected revenue growth for its most recent quarter.
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 per cent and 17 per cent for 2006. However yesterday, the software giant warned that this number would be closer to 13.5 per cent.
Fourth-quarter revenue is expected to be about €2.95 billion (£1.9bn), a year-over-year increase of seven per cent. Software revenue was up seven per cent for the quarter, totalling about €1.26bn (£835m), the company said.
Software sales slowed in the Americas and Asia-Pacific regions, SAP reported. In the US and Japan, sales dropped to a four per cent growth rate during the fourth quarter. The enterprise software vendor reported 13 per cent 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 (SAP) closed at $48.50 (£30) yesterday, down more than 10 per cent from the previous day’s $54.13 (£27.79) close.