SAP releases Q3 results, trims expectations

Business software maker SAP AG released financial results for the third quarter Thursday, and cut back its growth prediction for the full year.

Net income stood at 78 million euros (US$71 million as of Sept. 30, the last day of the quarter), adjusted for the cost of acquiring TopTier Software Inc. and for additional investment in Commerce One Inc. That marks a drop of 12 percent from the third-quarter 2000 revenue of 88 million euros.

Revenue for the quarter amounted to 1.65 billion euros, an increase of 16 percent over the 1.42 billion euros posted during the same period of 2000, the company said in a statement.

Earnings per share for the quarter came to 0.25 euros, as against 0.28 euros for the same period last year.

The company is reining in expectations for full-year results, now predicting revenue growth of 15 percent instead of the 20 percent forecast at the end of the second quarter. SAP referred to "significant changes in the software market, mainly in the U.S., with customers and prospects postponing decisions on software purchases."

SAP agreed in March to acquire TopTier, a maker of portal software, for $400 million in cash. In June, SAP promised to inject up to $250 million in new investment capital into electronic commerce specialist Commerce One, increasing its stake in the company to just over 20 percent. SAP hinted at possible staff cuts to come, stating that "the company is accelerating cost reduction measurements, including adjusting the levels and mix of its employees, particularly in the U.S. The company continues to extend its infrastructure in certain areas where SAP is growing its profile, such as CRM (customer relationship management) and SCM (supply chain management)."

The company highlighted the importance of those two areas in the quarter, with revenue from the company's mySAP CRM products reaching some 78 million euros, or 17 percent of the total software license sales of 447 million euros, and mySAP SCM revenue at around 98 million euros.

But overall, license revenue was down 7 percent from the 480 million euros collected in the third quarter of 2000, a blow to the company, which has pinned its hopes on increasing license fees from its platform. By contrast, product revenue in the third quarter was up 9 percent to 995 million euros, consulting earnings rose 30 percent to 524 million euros, and receipts from training grew 19 percent, to 113 million euros.

On a regional basis, revenue in Europe, the Middle East and Africa was at 841 million euros, an increase of 32 percent over the third-quarter 2000 figure of 639 million euros. In the Asia-Pacific region, revenue was down 6 percent to 195 million euros, from 208 million euros. And revenue in the Americas region was up 7 percent to 613 million euros, from the 574 million euros posted in the same period last year.

SAP management will discuss the results during a conference call scheduled for 5:00 p.m. Central European time Thursday, to be broadcast over the Web at

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