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SAP disappoints despite profit increase

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SAP disappoints despite profit increase
Photo: DPA
10:33 CEST+02:00
SAP, the professional software giant, posted on Wednesday a third quarter net profit of €501 million ($690 million), a gain of 12 percent from the same period a year earlier.

Analysts polled by Dow Jones Newswires had forecast a higher profit of €560 million for the group, which competes with companies like Microsoft and Oracle.

Sales of software and related services showed gains of at least 20 percent meanwhile, owing in large part to the acquisition of the US firm Sybase, and SAP confirmed its outlook for all of 2010.

A SAP statement said software revenues, a key benchmark, gained 25 percent to €656 million, while revenue from related services was 20 percent higher at €2.3 billion.

Analysts polled by Dow Jones Newswires had forecast software revenue at €645 million and total revenues of €2.96 billion.

"All of the regions reported growth in the third quarter, with particular strength in the US and the emerging markets of Asia, Europe and Latin America," the statement quoted finance director Werner Brandt as saying.

"We saw a good mix of revenues among small, mid-sized and large enterprises, and we had an increase in deal volume," he added.

SAP acquired Sybase in a deal worth $5.8 billion that closed at the end of July, and prior-year figures did not include Sybase's contribution to revenue and profit.

The group which is based in Walldorf, south-western Germany, said operating profit was 16 percent higher at €716 million, though its operating margin was slightly lower at 23.8 percent.

SAP nonetheless confirmed full-year targets of a nine to 11 percent increase in software revenue and an operating margin of 30-31 percent.

AFP/rm

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