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Strong euro tarnishes SAP's fourth-quarter sales

The strong euro has blighted the balance sheet of German business software company SAP.

The strong euro has blighted the balance sheet of German business software company SAP.

SAP, which is Europe's largest software company, expects fourth-quarter software licence sales in 2003 of around €930m (£641.3m on 31 December, the last day of the period being reported), or around 3% below revenue of €958m a year ago. 

On a constant currency basis, fourth-quarter software licence revenue was up 4% compared with the same period the previous year.

SAP projects software licence revenue for the full year to be around €2.15bn, representing a decline of 6% compared with €2.29bn reported in 2002. On a constant currency basis, full-year sales were up approximately 1% over the previous year.

Total revenue for the fourth quarter is expected to be around €2.2bn, down about 3% from €2.3bn. On a constant currency basis, fourth-quarter sales were up 4% year on year.

The software revenue results were largely achieved through strong performance in the US and Germany.

SAP said it expected to "significantly exceed its previously published target for pro forma operating margin".

Operating margin, excluding stock-based compensation programs and acquisition costs, is expected to rise by 4 additional percentage points to 27% in 2003.

SAP will report detailed fourth-quarter results next week.

John Blau writes for IDG News Service

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