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Oct. 11, 2019, 6:58 a.m. EDT

SAP shares jump after earnings beat forecasts, company says CEO stepping down

Software group says third-quarter revenue rose 10% and reaffirms full-year outlook

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By Barbara Kollmeyer, MarketWatch


Bloomberg News
Bill McDermott, chief executive officer of SAP.

Shares of SAP SE rallied Friday after the company announced a surprise change in leadership and pre-announced third-quarter earnings that were better than expected.

A 7% gain for heavily-weighted SAP  /zigman2/quotes/203458330/delayed DE:SAP +0.04%  helped drive up the German DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX -0.70%  and the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -0.66% . U.S.-listed shares /zigman2/quotes/207905606/composite SAP -0.17% /zigman2/quotes/207905606/composite SAP -0.17% were up 8%.

The company pre-announced its results late Thursday, and said its American Chief Executive Bill McDermott would step down immediately and be replaced by two co-CEOs — Jennifer Morgan and Christian Klein. McDermott, who has been at his post for a decade, will remain in an advisory capacity until the end of the year, the company said.

“In our view, McDermott’s departure is somewhat surprising, but appears to follow “the company’s long-term succession plan,’” Warburg analyst Andreas Wolf told clients in a note. The analyst maintained his buy rating on the company.

SAP said third-quarter revenue rose 10% to €6.79 billion ($7.5 billion), ahead of the €6.69 billion analysts were expecting. Cloud and software revenue climbed 10%, and new cloud bookings rose 38%.

Earnings on an non-IFRS (International Financial Reporting Standards) basis were €1.30 per share, ahead of the €1.19 a share expected by analysts. The company reaffirmed its outlook for 2019. Complete earnings will be released on Oct. 21. /zigman2/quotes/207905606/composite SAP -0.17%

/zigman2/quotes/203458330/delayed
DE : Germany: Frankfurt
134.96
+0.06 +0.04%
Volume: 167.00
Sept. 21, 2020 8:04a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€256,047
loading...
/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
13,116.25
-91.87 -0.70%
Volume: 185,861
Sept. 18, 2020 6:30p
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
368.78
-2.45 -0.66%
Volume: 0.00
Sept. 18, 2020 11:03p
loading...
/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 160.15
-0.28 -0.17%
Volume: 713,217
Sept. 18, 2020 4:00p
P/E Ratio
37.77
Dividend Yield
0.78%
Market Cap
$189.57 billion
Rev. per Employee
$302,071
loading...
/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 160.15
-0.28 -0.17%
Volume: 713,217
Sept. 18, 2020 4:00p
P/E Ratio
37.77
Dividend Yield
0.78%
Market Cap
$189.57 billion
Rev. per Employee
$302,071
loading...
/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 160.15
-0.28 -0.17%
Volume: 713,217
Sept. 18, 2020 4:00p
P/E Ratio
37.77
Dividend Yield
0.78%
Market Cap
$189.57 billion
Rev. per Employee
$302,071
loading...

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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