SAP warned that its third-quarter revenues are expected to come in below Wall Street's projections, driving its stock down by a whopping 17.6 percent in intraday trading.
The enterprise software behemoth noted that a preliminary review of its financial performance indicates that its third-quarter software and software-related service revenues are expected to range between 1.97 billion and 1.98 billion euros ($2.66 billion to $2.68 billion), a 13 percent to 14 percent increase over the same time last year.
However, Wall Street had been expecting the company to post revenues of 2.863 billion euros ($3.87 billion), according to Thomson Financial.
Henning Kagermann, SAP's co-chief executive, had this assessment in a statement:
The market developments of the past several weeks 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.
Throughout the third quarter, we felt quite positive about our ability to meet our expectations. 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.
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On the bright note, Kagermann noted that while revenues contracted, the business fundamentals of its operations remain intact.
"SAP did report double-digit growth in software and software-related service revenues for the quarter, and we expect to have gained further market share," he said.
Nonetheless, SAP shares fell 17.6 percent to $37.60 a share in intraday trading, as investors bailed on the stock.
SAP archrival Oracle, meanwhile, also saw its stock sink, as investors worried that SAP's woes are an industry problem and not just SAP-specific.
Oracle fell as much as 10.5 percent to $17.43 a share in intraday trading, compared to Friday's close.