SAP posts strong profit rise on better Q3 sales

German business software company SAP AG reported Thursday a strong rise in profit on slightly improved third-quarter revenue.

Net income for the third quarter was €202 million, (US$198 million on Sept. 30, the last day of the period being reported) compared to €37 million for the same period in 2001, while operating income for the third quarter rose to €336 million, compared to €159 million for the same period the year before, the company said in a statement.

Revenue increased by 3 percent to €1.7 billion for the third quarter of 2002, compared to €1.65 billion for the same period last year. For the nine months ending Sept. 30, 2002, sales increased 2 percent to €5.14 billion, compared to €5.03 billion for the first nine months of 2001.

Nevertheless, SAP withdrew its forecast of between 5 percent and 10 percent revenue growth this year due to political and economic uncertainties. The withdrawal of the 2002 revenue target doesn't come as a complete surprise, following the company's move to lower its original target of 15 percent in July.

Product revenue in the third quarter rose to €1.04 billion compared to €995 million for the same period in 2001, while license revenue dipped to €435 million from €447 million.

Revenue from CRM (customer relationship management) software rose 19 percent to €93 million in the third quarter compared to €78 million for the same period in 2001. That increase is an encouraging signal for SAP, which is eager to close the gap between itself and Siebel Systems Inc., the market leader for CRM software.

Less positive was the 3 percent drop in SCM (supply chain management) software revenue to €95 million in the third quarter from €98 million for the same period the year before.

The number of full-time employees on Sept. 30 was 28,909, a drop of 2 percent since June 30.

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