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Business software vendor SAP has dropped its forecast of a 24-27 per cent annual sales jump due to uncertain sales, with co-CEO Henning Kagerman pledging to cut cost by ten per cent, saying he had “never witnessed such a decline in customer spending in such a short time.”
After an earlier forecast of a 29 per cent operating margin, SAP’s other co-CEO Leo Apotheker said that the firm would only hit that target if sales and service revenue grew by at least 20 per cent and if production costs fall as planned.
Three weeks ago, SAP warned that demand had dropped in the last 12 days of the third quarter after the collapse of Lehmann Brothers, while sales of software licenses – a measure of future service and maintenance revenues – grew by three per cent less than in the same period last year.
Fears over corporate IT spending have seen SAP’s shares drop from €40 to around €24.50.
Source: FT
