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SAP notches up 23% quarterly profit rise

German business software company SAP has reported a 23% increase in first-quarter net income, which was boosted by increased software spending, particularly in the US.

Net income rose to €229m from €186m for the same period last year.

Total revenue, which includes maintenance and consulting in addition to software, increased 2% to €1.56bn from €1.52bn.

Software revenue increased 5% to €370m from €352m. At constant currency rates, software revenue was up 11%. Constant currency rates exclude the impact of fluctuations in currency exchange rates.

In the US, software revenue rose 45% to €103m, or 65% at constant currency rates.

Software revenue in the Americas climbed 44% to €127m, while revenue in Europe, the Middle East and Africa slipped 4% to €197mn. In Germany, SAP's home market, revenue was down 1% to €85m.

Another underperforming region was Asia Pacific, Australia and New Zealand, where software revenue dropped 22% to €46m. Revenue in Japan plummeted 37% to €22m.

SAP's flagship enterprise resource planning software continued to account for the bulk of software revenue, generating revenue of €156m, or 42% of the group's total software revenue.

One-third of orders placed in the first quarter came from new customers, the most in three years.

SAP expanded its market share against its four largest competitors, based on software licence sales, to 54% at the end of the first quarter from 51% for the same period last year.

SAP lists its four main competitors as Microsoft, Oracle, PeopleSoft and Siebel Systems.

The outlook for 2004 remains unchanged, and software revenue is expected to increase by around 10%.

SAP has struck a deal with FedEx's Trade Networks unit. The companies will integrate worldwide duty and tax data from FedEx Trade Networks into SAP's Global Trade Services business application.

John Blau writes for IDG News Service


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