SAP posts strong profit rise on better sales

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SAP posts strong profit rise on better sales

German business software company SAP has reported a strong rise in profit on slightly improved third-quarter revenue.

Net income for the third quarter was €202m, (£128m) to 30 September compared with €37m (£23m) for the same period in 2001, while operating income for the third quarter rose to €336m (£212m), compared with €159m (£101m) for the same period last year.

Revenue increased by 3% to €1.7bn (£1.08bn) for the third quarter of 2002, compared with €1.65bn (£1.04bn) for the same period last year. For the nine months to 30 September, sales increased 2% to €5.14bn (£3.25bn), compared with €5.03bn (£3.18bn) for the first nine months of 2001.

Nevertheless, SAP withdrew its forecast of between 5% and 10% revenue growth this year because of political and economic uncertainties. The withdrawal of the 2002 revenue target does not come as a complete surprise following the company's move to lower its original target of 15% in July.

Product revenue in the third quarter rose to €1.04bn (£660m) compared with €995m (£629m) for the same period in 2001, while licence revenue dipped to €435m (£275m) from €447m (£283m).

Revenue from customer relationship management software rose 19% to €93m (£59m) in the third quarter compared with €78m (£49m) for the same period in 2001. That increase is an encouraging signal for SAP, which is eager to close the gap between itself and CRM software market leader Siebel Systems.

Less positive was the 3% drop in supply chain management software revenue to €95m (£60m) in the third quarter from €98m (£62m) for the same period the year before.

The number of full-time employees was 28,909, a drop of 2% since 30 June.

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