The strong euro is beginning to mess up the balance sheet of Europe's largest software company.
German business software vendor SAP expects fourth-quarter software license sales in 2003 of around €930 million (US$1.2 billion on Dec. 31, the last day of the period being reported), or around 3 percent below year-earlier revenue of €958 million, the Walldorf, Germany, company said Tuesday in a statement to the Frankfurt stock exchange.
On a constant currency basis, fourth-quarter software license revenue was up 4 percent compared to the same period the year before, the company said.
SAP projects software license revenue for the full year to be around €2.15 billion, representing a decline of 6 percent compared to €2.29 billion reported in 2002. On a constant currency basis, full year sales were up approximately 1 percent over the previous year.
Total revenue for the fourth quarter is expected to be around €2.2 billion, down about 3 percent from €2.3 billion in the same period the year before, the company said. On a constant currency basis, fourth-quarter sales were up 4 percent year-on-year.
The software revenue results were largely achieved through strong performance in the U.S. and Germany, the company said.
SAP said it expects 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 percent in 2003, the company said.
The company will report detailed fourth-quarter results on Jan. 22.