×

SAP Shares Jump as It Raises Outlook; Co-CEO Upbeat

SAP shares rose on Wednesday after the company posted strong earnings and raised its outlook, despite market fears over the debt situation in Europe and the US.

Close-up of a pen on stock price chart
Close-up of a pen on stock price chart

Innovation is the key to the German software maker's success, and the company sees strong growth ahead, Jim Hagemann Snabe, co-CEO at SAP , told CNBC in an interview.

"We see tremendous growth opportunity still and we are investing in innovation and accelerating the innovation pace despite the situation in the markets," Hagemann Snabe said.

SAP, the world's biggest maker of business software, said Tuesday after the close of European markets that it would reach the high end of its 2011 forecasts as the company developed new products to help mobility, cloud computing and quicker data retrieval.

"We ... have articulated a very strong innovation-oriented strategy and mobility plays a very strong part in that," Hagemann Snabe said.

SAP's operating profit jumped 11 percent o 857 million euros in the second quarter from the year ago while profit after tax jumped 20 percent to 588 million euros.

Customers wanted to free up investment for innovation and asked SAP to help them cut costs, he added.

"If you look at our results this quarter you'll see that it's not only the new categories that drive growth for us, it's also the traditional core business of SAP," Hagemann Snabe said.

SAP expects operating profit to hit the high end of a previously communicated range of between 4.45 billion euros ($6.45 billion) and 4.65 billion this year, after increasing by 26 percent in the second quarter.

"This focus on innovation, bringing out new technologies, new software solutions helped drive the growth for SAP," Hagemann Snabe said.

The company benefited from the euro's weakening over the quarter, but even with a strong euro, it runs "a global portfolio" and would benefit from being in based in countries with different currencies, he added.

The current market turmoil is unlikely to hit SAP's plans very hard, according to Hagemann Snabe.

"Obviously uncertainty is not good for business but we've decided to stay focused on our innovation strategy," he said.