SAP AG, the world's largest maker of business-management software, raised its full-year earnings forecast after third-quarter net income rose 25 percent and revenue declined less than analysts had predicted.
Net income climbed to 252 million euros ($293 million), or 81 cents a share, from 202 million euros, or 65 cents a share, a year earlier, spokesman Markus Berner said. Walldorf, Germany- based SAP said it now expects full-year earnings per share to be at the higher end of its forecast range of between 3.45 euros and 3.60 euros, excluding certain costs.
SAP, which added Washington Post Co. and Hyundai Motor Co. to its 20,500 clients in the period, has been cutting marketing, administrative and sales costs to counter two years of falling license sales. SAP last week said software license revenue was little changed in the third quarter, beating analyst forecasts.
``It appears market share in the U.S. increased significantly,'' said Frank Joachim, who helps manage the equivalent of $12.8 billion at HSBC Trinkaus Capital Management in Dusseldorf. He said SAP's increased forecast for 2 percentage points of operating margin growth this year ``seemed cautious.''
SAP, whose software manages tasks including payroll and inventory, in July said the operating margin before some items would grow as much as 1.5 percentage points from 22.7 percent in 2002. It's the second time it has raised the forecast this year.
The shares fell as much as 2.2 percent to 125.05 euros and traded at 125.65 euros as of 11:25 a.m. in Frankfurt. Before today, the stock had gained more than two-thirds this year. It jumped 14 percent last Wednesday after the company unexpectedly reported third-quarter revenue figures.
License Sales
Software license revenue, which gives an indication of how much future maintenance and service business can be generated, slipped to 433 million euros in the third quarter from 435 million euros a year earlier. SAP last week said preliminary figures showed license revenue at 430 million euros. Total sales fell to $1.65 billion euros from 1.7 billion euros.
PeopleSoft Inc., the No. 2 maker of business-management software, also released some earnings figures ahead of schedule last week as profit and sales exceeded its forecasts. PeopleSoft CEO Craig Conway yesterday said information-technology spending is ``returning to normal'' as clients scrutinize purchases less.
SAP, which also competes with Oracle Corp. and Siebel Systems Inc., said results in the period were aided by delayed second-quarter contracts that were signed in the third quarter and improved business in the U.S.
Siebel, SAP's biggest competitor in customer-service software, yesterday reported a narrower third-quarter loss and announced two acquisitions. SAP today indicated its market share in customer relationship management software now equals Siebel's when measured on a rolling four-quarter basis.
U.S. Market Share
``On a rolling four quarter basis, the company believes it continued to gain market share in the U.S. and strengthened its No. 1 position as the largest business software vendor in terms of market share in the U.S. based on software revenues,'' SAP said in its statement.
Revenue in the Americas declined 2 percent to 572 million euros. At constant currency rates, sales climbed 11 percent. Revenue in Asia was little changed, and sales in Europe, the Middle East and Africa declined 4 percent.
Europe, SAP's biggest market, ``continued to face a tough economic environment,'' the company said.
Operating expenses declined 9 percent in the period. Chief Executive Officer Henning Kagermann in July said the 31-year-old German company will have more difficulty reducing costs during the rest of 2003 after entering a second year of cuts in the third quarter.
SAP added 204 employees in the third quarter, bringing the total workforce to 29,165.
Net income climbed to 252 million euros ($293 million), or 81 cents a share, from 202 million euros, or 65 cents a share, a year earlier, spokesman Markus Berner said. Walldorf, Germany- based SAP said it now expects full-year earnings per share to be at the higher end of its forecast range of between 3.45 euros and 3.60 euros, excluding certain costs.
SAP, which added Washington Post Co. and Hyundai Motor Co. to its 20,500 clients in the period, has been cutting marketing, administrative and sales costs to counter two years of falling license sales. SAP last week said software license revenue was little changed in the third quarter, beating analyst forecasts.
``It appears market share in the U.S. increased significantly,'' said Frank Joachim, who helps manage the equivalent of $12.8 billion at HSBC Trinkaus Capital Management in Dusseldorf. He said SAP's increased forecast for 2 percentage points of operating margin growth this year ``seemed cautious.''
SAP, whose software manages tasks including payroll and inventory, in July said the operating margin before some items would grow as much as 1.5 percentage points from 22.7 percent in 2002. It's the second time it has raised the forecast this year.
The shares fell as much as 2.2 percent to 125.05 euros and traded at 125.65 euros as of 11:25 a.m. in Frankfurt. Before today, the stock had gained more than two-thirds this year. It jumped 14 percent last Wednesday after the company unexpectedly reported third-quarter revenue figures.
License Sales
Software license revenue, which gives an indication of how much future maintenance and service business can be generated, slipped to 433 million euros in the third quarter from 435 million euros a year earlier. SAP last week said preliminary figures showed license revenue at 430 million euros. Total sales fell to $1.65 billion euros from 1.7 billion euros.
PeopleSoft Inc., the No. 2 maker of business-management software, also released some earnings figures ahead of schedule last week as profit and sales exceeded its forecasts. PeopleSoft CEO Craig Conway yesterday said information-technology spending is ``returning to normal'' as clients scrutinize purchases less.
SAP, which also competes with Oracle Corp. and Siebel Systems Inc., said results in the period were aided by delayed second-quarter contracts that were signed in the third quarter and improved business in the U.S.
Siebel, SAP's biggest competitor in customer-service software, yesterday reported a narrower third-quarter loss and announced two acquisitions. SAP today indicated its market share in customer relationship management software now equals Siebel's when measured on a rolling four-quarter basis.
U.S. Market Share
``On a rolling four quarter basis, the company believes it continued to gain market share in the U.S. and strengthened its No. 1 position as the largest business software vendor in terms of market share in the U.S. based on software revenues,'' SAP said in its statement.
Revenue in the Americas declined 2 percent to 572 million euros. At constant currency rates, sales climbed 11 percent. Revenue in Asia was little changed, and sales in Europe, the Middle East and Africa declined 4 percent.
Europe, SAP's biggest market, ``continued to face a tough economic environment,'' the company said.
Operating expenses declined 9 percent in the period. Chief Executive Officer Henning Kagermann in July said the 31-year-old German company will have more difficulty reducing costs during the rest of 2003 after entering a second year of cuts in the third quarter.
SAP added 204 employees in the third quarter, bringing the total workforce to 29,165.
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