SAP Q1 profit rises 23% on higher revenue, down in ANZ

German business software vendor SAP AG reported Thursday a 23 percent increase in first-quarter net income boosted by increased software spending, particularly in the U.S.

Net income rose to Euro 229 million (AUD$380 million as of March 31, the last day of the period being reported) from Euro 186 million a year earlier, the Walldorf, Germany, software company said in a statement.

Total revenue, which includes maintenance and consulting in addition to software, increased 2 percent to Euro 1.56 billion from Euro 1.52 billion a year earlier.

Software revenue -- a closely watched indicator of the group's performance -- increased 5 percent to Euro 370 million from Euro 352 million. At constant currency rates, software revenue was up 11 percent. Constant currency rates exclude the impact of fluctuations in currency exchange rates.

In the U.S., software revenue rose 45 percent to Euro 103 million, or 65 percent at constant currency rates.

Software revenue in the Americas climbed 44 percent to Euro 127 million, while revenue in Europe, the Middle East and Africa (EMEA) slipped 4 percent to Euro 197 million. In Germany, SAP's home market, revenue was down 1 percent to Euro 85 million.

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

SAP's flagship ERP (enterprise resource planning) software continued to account for the lion's share of software revenue. The product generated revenue of Euro 156 million, or 42 percent 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, the company said.

SAP expanded its market share against its four largest competitors, based on software license sales, to 54 percent at the end of the first quarter from 51 percent at the end of March a year earlier, the company said. SAP lists its four main competitors as Microsoft Corp., Oracle Corp., PeopleSoft Inc. and Siebel Systems Inc.

The outlook for 2004 remains unchanged, SAP said. Software revenue is expected to increase by around 10 percent compared to 2003. The outlook is based on an assumed U.S. dollar to euro exchange rate of $1.25 per euro.

On Thursday, SAP also announced a partnership with FedEx Corp.'s FedEx Trade Networks unit. Under the deal, the companies will integrate worldwide duty and tax data from FedEx Trade Networks into SAP's Global Trade Services business application.

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