SAP disappoints despite profit increase

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.

SAP disappoints despite profit increase
Photo: DPA

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.


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German IT watchdog says ‘no evidence’ of Huawei spying

Germany's IT watchdog has expressed scepticism about calls for a boycott of Chinese telecoms giant Huawei, saying it has seen no evidence the firm could use its equipment to spy for Beijing, news weekly Spiegel reported Friday.

German IT watchdog says 'no evidence' of Huawei spying
A woman in China looks at her phone as she passes an advert for Huawei mobile phones. Photo: Andy Wong / AP / dpa
“For such serious decisions like a ban, you need proof,” the head of Germany's Federal Office for Information Security (BSI), Arne Schönbohm, told Spiegel, adding that his agency had no such evidence.
Huawei has faced increasing scrutiny over its alleged links to Chinese intelligence services, prompting countries like the United States, Australia and Japan to block it from building their next-generation, super-fast 5G internet networks.
The US has put pressure on Germany to follow suit, Spiegel wrote.
Schönbohm said BSI experts had examined Huawei products and components from around the world.
They had also visited Huawei's newly opened lab in Bonn, where German clients can inspect the firm's cyber security measures and the software behind its products.
But some observers raised eyebrows at the BSI's apparent dismissal of cyber security risks concerning Huawei.
“I believe it's wrong to suggest that the concerns about Chinese espionage are unfounded and easy to detect,” telecom security expert Ronja Kniep told AFP.
“Even if Huawei has no official relationship with the Chinese government, that doesn't mean Chinese services aren't using the company and its technology as vehicles for espionage.”
All three of Germany's main mobile network operators use infrastructure provided by Huawei, Spiegel pointed out.
The Chinese firm is also the brand behind some of Germany's most popular mobile phones.