SAP SE’s share price up, posts upbeat second-quarter revenue boosted by online applications

The biggest manufacturer of business-management software – SAP SE made an official statement today, revealing that its revenue over the second financial quarter rose thanks to online applications. The operating profit of the company also increased.

The Chief Executive Officer of SAP – Mr. McDermott said in an interview for Bloomberg TV: “We’ve never seen more tailwind behind SAP’s business model than right now.” He also explained that the business “picked up in last 60 days more so than in the prior four months” and increased momentum is particularly evident at the arena of cloud computing services and the Hana database of SAP SE.

According to the SAP SEs statement, its revenue generated from software and related support services increased by 4% and reached 3.48 billion euros (4.7 billion dollars). The company said that its operating profit excluding some items over the period rose by 4% to 1.24 billion euros in comparison to the initial analysts forecasts of a 3.45-billion-euro revenue and an 1.26-billion-euro operating profit.

The cloud-based products and services are considered of extreme importance to the company, due to the fact they offer huge revenue potential for SAP SE. Mr. Bill McDermott said that the cloud services of the company are expected to be profitable and explained for the Wall Street Journal: “Over time, youll have a just-as-good margin in the cloud, if not better.”

The current Chief Executive Officer of the company – Mr. Bill McDermott, who took over the helm in May, has been focused on restructuring SAPs sales operations in a way that would give priority to the cloud services, as well as making its products and services portfolio simpler. The company is also dealing with the fierce competition from cloud-services providers such as NetSuite, Workday and Salesforce.com.

SAP SE was adding 3.86% to trade at 60.24 euros per share by 12:18 GMT, marking a one year change of +4.46%. According to the information published on the Financial Times, the 33 analysts offering 12-month price targets for SAP SE have a median target of 63.10, with a high estimate of 88.00 and a low estimate of 43.37. The median estimate represents a 8.79% increase from the last price of 58.00.