SAP shares plunge to biggest intraday slump since 1999, wiping $35bn off its value
Watch: SAP CFO sees `challenging' demand environment until mid-2021
German software giant SAP (SAP.DE) revised its outlook downwards on Sunday evening, causing its shares to plunge by almost 21% in early trading on Monday morning, wiping about $35bn (£27bn, €29.6bn) off its value.
SAP said that for 2020 it now expects revenue in the range of €27.2bn (£24.7bn, $34.2bn) to €27.8bn, down from a previous forecast for between €27.8bn to €28.5bn, as the uptick in demand has been more restrained than it had expected.
The company said in a statement that it its previous forecast was based on the assumption that lockdowns would ease and economies would open again, but “lockdowns have been recently re-introduced in some regions and demand recovery has been more muted than expected.”
SAP said that sales will only recover cautiously in the next two years and that the pandemic, will "probably have a negative impact until at least the first half of 2021.”
Third-quarter sales fell 4% to €6.5bn, but were buoyed by SAP’s cloud-computing business, which saw 11% growth. It said revenue from its cloud business is expected to triple to €22bn by 2025.
SAP said that adjusted operating profit for 2020 is expected to be between €8.1bn and €8.5bn, this year. In 2019, it was €8.2bn.
Monday’s SAP share price drop was the biggest intraday slump since 1999. The software companies shares had hit an all-time high of around €142 in September.
The company also said it was pressing ahead with the US listing of its Qualtrics enterprise software unit, which it bought less than two years ago for $8bn.
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