New license and SAP unit sale knackers Software AG's numbers

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New license and SAP unit sale knackers Software AG's numbers

Q2 revenues down by double digits, profits halved, CEO surprised

By | Gavin Clarke 24th July 2014 09:45

Delayed IT projects and offloading the SAP business have dealt Software AG’s business a double blow for its latest quarter.

Germany’s other major software maker today reported a second-quarter revenue drop of 18 per cent to €196m ($263.9m) and net income halved to €14.2m ($19.1m).

Earnings per share was also almost halved to €0.18 ($0.24).

In line with the company's on-prem peers, sales of new software slumped: new licences for the Business Process Excellence (BPE) portfolio was down 24 per cent to €32.7m ($44m) and ETS database licences fell 47 per cent to €17.4m ($19m).

Maintenance of its software was up – again, just like Software AG’s rivals: BPE climbed seven per cent to €51.9m ($61.8m) and ETS rose 11 per cent to €38.3 ($51.5m).

Consulting took a hit, falling six per cent to €47.2m.

The company blamed delays to big ticket project sign-offs for the fall in customers' spending on new Software AG licenses.

Chief executive Karl-Heinz Streibich is reported here to have called the drop in BPE a "surprise."

As for consulting, Software AG's trailing off of money that would have normally come from the company’s SAP consulting unit.

Software AG in June sold the final, European-chunk of its global SAP practices to Scheer Group having flogged the North American and Eastern European units last year. Software AG’s plan is to focus on development, sale and support of its own software instead.