SAP stock down 16%

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This news article contains a lot of financial bad news vocabulary we will unfortunately be confronted with in the coming year or so. I guess it’s not a bad idea to get used to using it correctly. Note the false friends:

English German
stark = ungeschönt stark = strong
loan = Darlehen Lohn = salary
= Sorgen Konzerne = conglomerates

“Financial sector fears hurt SAP demand (by Gerrit Wiesmann for Financial Times, 6 Oct. 2008):

“SAP, the world’s largest maker of software for business, gave a stark indication of how the credit crisis is spreading beyond the financial sector, when it revealed demand for installing and servicing corporate software plummeted in the third quarter. In a release of preliminary sales data for the period, SAP co-chief executive Henning Kagermann said companies’ concerns about developments in the financial markets had “triggered a very sudden and unexpected drop in business activity” up to the end of September. Signs that companies are beginning to defer spending on information technology saw SAP’s stock price plunge. The company’s shares slumped 16 per cent to close at €28.84, making it the second worst performing stock on Frankfurt’s blue-chip DAX. The German company, which in July had boasted its business was largely insulated from the swings of the global economy, said many buying decisions were being delayed rather than completely killed off, and insisted that “the fundamentals of our business remain in place”. But Mr Kagermann signalled demand for SAP software, used in account management and the processing of client data, started to wane mid-September, around the time US investment bank Lehman Brothers filed for bankruptcysetting off a series of banking bail-outs. As a result, SAP’s co-chief executive said, revenues from software sales, service contracts, and subscriptions would reach between €1.97bn to €1.98bn in the third quarter, a rise of up to 14 per cent, but still “below our expectations”. The company said software revenues on their own would reach €740m-€750m, some 4 to 5 per cent above the €715m seen in the same quarter last year – but well below analysts’ expectations of third-quarter software revenues of up to €860m. SAP’s pre-release of its sales data and downbeat assessment of trading at the end of the third quarter added more gloom to the outlook for the real economy. SAP is due to release its earnings on 28 October. The strictures of the credit crunch have not only brought lending between banks to a standstill. They have also raised the prospect that consumers and manufacturers, the core of SAP’s clientele, will have to cut spending as they find it increasingly difficult to borrow money. SAP’s remarks on trading conditions at the end of last month were echoed by BMW recently. Norbert Reithofer, the chief executive of the German premium carmaker, told the FT last week: “We felt something change in September.” He suggested there was little individual companies could do to buck the ebb in demand. “[It] is a global issue,” he said. Over the summer, Mr Kagermann shook off worries about the effect of the credit crunch on SAP. Good times saw companies invest in growing IT needs, he argued, while tough times would see more companies put money into their systems to help cut costs.”


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