IBI Investment House Ltd. warns that the profit warning published by SAP AG (NYSE; XETRA: SAP) yesterday jeopardizes Israeli IT integrators that install SAP and Oracle systems, including Matrix IT Ltd. (TASE:MTRX), Ness Technologies Ltd. (Nasdaq: NSTC), Malam Team Ltd. (TASE: MLTM), One1 Software Technologies Ltd. (TASE: ONE), and Taldor Group (TASE: TALD), which could lose business.
IBI analyst Uri Licht said that the global financial crisis was slowing affecting manufacturers and that high-tech companies were now being dragged in. Google Inc. (Nasdaq: GOOG) has cut its guidance, eBay Inc. (Nasdaq: EBAY) has fired employees, and now SAP has issued a profit warning.
SAP yesterday announced that its third-quarter revenue forecast is "below our expectations." SAP says that third quarter software and software-related service revenue would be 13-14% more than for the corresponding quarter of 2007, compared with its previous forecast of 25-27% growth. It predicts €1.97-1.98 billion revenue.
Co-CEO Henning Kagermann cited market developments that "have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter." He added, "Unfortunately, SAP was not immune from the economic and financial crisis that has enveloped the markets in the second half of September, causing us to report numbers below our expectations."
SAP's share fell 13.1% on the NYSE to $39.68. The share fell 15% on the XETRA yesterday and a further 10% today to €25.96. Oracle's share fell 6% yesterday to $18.30.
Published by Globes [online], Israel business news - www.globes-online.com - on October 7, 2008
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