Bloomberg News

SAP Beats Estimates With 25% Dividend Boost, One-Time Payout

February 24, 2012

Co-Chief Executive Officers Bill McDermott, left, and Jim Hagemann Snabe, right, said, “The best year in the history of our company should also be the best year for our shareholders.” Photographer: Hannelore Foerster/Bloomberg

Co-Chief Executive Officers Bill McDermott, left, and Jim Hagemann Snabe, right, said, “The best year in the history of our company should also be the best year for our shareholders.” Photographer: Hannelore Foerster/Bloomberg

SAP AG (SAP), the biggest maker of business management applications, proposed a dividend that exceeded analysts’ estimates after posting record profit last year that left shares of rival Oracle Corp. (ORCL) trailing.

The executive board recommended a 25 percent increase of its 2011 dividend to 75 cents a share, plus a one-time 35-cent payout for its 40th anniversary, Walldorf, Germany-based SAP said yesterday. Analysts had projected 72 cents, according to estimates compiled by Bloomberg.

The stock rose as much as 2.3 percent in Frankfurt. SAP last month reported fourth-quarter revenue and operating profit that beat estimates, while Oracle Corp. fell short in its most recent quarter. SAP forecast profit will rise this year, boosted by demand for analytics software and mobile programs. The new dividend would see SAP paying out 38 percent of earnings to shareholders at a cost of 1.3 billion euros, the company said.

“The best year in the history of our company should also be the best year for our shareholders,” co-Chief Executive Officers Bill McDermott and Jim Hagemann Snabe said in the statement. “The proposed dividend enables our shareholders to partake in our success.”

The shares gained as much as 1.16 euros to 50.73 euros and traded at 50.69 euros as of 10:04 a.m. in Frankfurt. The stock had gained about 16 percent in the 12 months through yesterday, compared with an 11 percent drop at Redwood City, California- based Oracle and a 2 percent decline at Salesforce.com Inc. (CRM), which is based in San Francisco.

Separately, SAP shares were rated “overweight” in resumed coverage by Morgan Stanley, which set a price target of 60 euros.

To contact the reporters on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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