The German maker of expensive business software maker, which no one is sure what it does, has warned that volatile exchange rates keep it awake at night.
SAP warned that it expected the negative impact of volatile exchange rates to worsen in the second quarter because of the strong euro.
The euro is fast becoming too strong for outfits like SAP which rely on cash from the Americas and the Land of the Rising Sun.
The euro has climbed 2.3 percent against the US dollar and nearly six percent against Japan’s yen in the past six months.
SAP said its software and software-related service revenues would take a six percentage point hit in the second quarter if exchange rates remained at March levels. Operating profit excluding special items would be eight percentage points lower.
In the first quarter, a strong exchange rate had a first-quarter impact of five percentage points on both software and software-related service revenues and operating profit.
For the full year, SAP expects operating profit will be negatively impacted by 5 percentage points.
SAP reported a two percent rise in first-quarter operating profit, excluding special items, to $1.271 billion fuelled by its web-based software products.
This was well below what the City thought SAP would make. In fact it predicted $1.329 billion would be a nice round sum.
Things are OK for the outfit in the EU. The company said it saw a solid regional performance in Europe, despite uncertainties in Russia amid the Crimea crisis.
First-quarter revenue rose 2 percent to $5.12 billion, helped by SAP’s internet computing, or cloud business, where revenues jumped more than a third to $305.82 million.
Earlier this year, SAP pushed back its profit target as it waits for subscription revenue from cloud-computing to make it more dosh.