Software AG shares fall after profit margin outlook cut

Software AG

01/02/2023 07:46

** Shares in Software AG  SOWGn.DE  fall 6.5% in early
Frankfurt trade after the German software developer cut its 2023
margin guidance
    ** The IT firm that competes with SAP  SAPG.DE  expects
operating profit margin (EBITA) to grow 16-18% this year, down
from a previous target of 25-30% rise
    ** "The outlook is not convincing. FY23 margin guidance
should weigh heavily on profit and FCF expectations," a local
trader says
    ** The trader adds that mixed 2022 report already showed
weaker profitability and cash flow as strong old business Adabas
& Natural (A&N) overshined an again weak Digital Business future
growth unit
    ** J.P.Morgan notes the 2023 outlook implies a mid-teens cut
to consensus adjusted EBITA at the midpoint
($1 = 0.9199 euros)
 (Reporting by Andrey Sychev)
 ((Andrey.Sychev2@thomsonreuters.com))