GO
Loading...

Enter multiple symbols separated by commas

SAP Surprises with Good Licence Sales in All Regions

SAP posted an 18% rise in software licence sales for the second quarter, surprising the market after arch-rival Oracle reported a slowdown in the Americas and Asia-Pacific.

Licence sales, crucial to hooking future maintenance and service revenues, rose to 715 million euros ($986 million), beating an average forecast of 674 million euros in a Reuters poll. SAP said it had won market share from Oracle and others.

Shares in SAP, the world's biggest maker of business software applications, rose more than 4%shortly after the open in Frankfurt on Thursday.

SAP said licence sales grew by a double-digit percentage in all regions.

"The numbers are very good. The company had a radical acceleration in growth," Cheuvreux analyst Bernd Laux said. "Market share and sales were particularly pleasing."

SAP said its share of the global market for core enterprise applications, in which it competes against the likes of Oracle and Microsoft, grew to 26.0 percent by the end of the second quarter from 25.1% at the end of March.

Operating profit also beat expectations with a 10% rise to 577 million euros. SAP spent only 50 million euros in the first half of 2007 of a planned 300 million to 400 million-euro investment over two years in new software for smaller companies.

The company made no mention in its earnings statement of any provision it may have made for fighting or settling a court case brought against it by Oracle. SAP has admitted some wrongdoing in the case, in which it is accused of stealing Oracle software.

SAP stuck to its full-year forecast to increase software and software-related service revenues by 12% to 14% at constant currencies, despite a 19% currency-adjusted rise to 1.707 billion euros in the second quarter.

It also repeated its 2007 operating margin was expected to fall to between 26% and 27% percent from 27.3% in 2006. In the second quarter, SAP's operating margin was 22%.

Sales of new licences for SAP's software, which helps mainly larger companies manage functions from supply chain management to human resources, grew 10% in the Americas, 22% in Europe and 27% in Asia-Pacific and Japan.

Adjusted for the effects of the dollar's fall to near-record lows against the euro, software licence sales grew 21% overall.

Total sales grew 10% to 2.42 billion euros, broadly in line with expectations, and net profit increased by 8% to 449 million euros, helped by a lower-than-expected tax rate.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Lottery ticket

    A thief who broke into the car of a Seattle couple left behind a million-dollar lottery ticket, NBC News reports.

  • The Lamborghini SpA Urus SUV.

    There's no shortage of luxury vehicle choices, but increasingly the wealthy are opting for high-end SUVs instead of traditional models.

  • Mike Trout #27 of the Los Angeles Angels takes a picture with fans before a game with Boston Red Sox at Fenway Park on May 23, 2015 in Boston, Massachusetts.

    MLB is using digital media initiatives like Snapchat and Web video to connect with younger viewers. Is it enough?

U.S. Video

  • Cramer: Here's the no. 1 play in cybersecurity

    Guarding Your Portfolio? "Mad Money" host Jim Cramer's got the number one pick for protection services in today's digital world.

  • Underestimate Cisco at own peril: Cramer

    Mad Money's Jim Cramer takes a look at the cybersecurity space to see if it could also protect your money.

  • Fly with LUV?

    While remaining profitable, Gary Kelly, Southwest Airlines chairman and CEO, tells Mad Money's Jim Cramer the company continues to focus on being a great airline and offering great customer service.