German business software developer SAP AG on Thursday reported growth of 78 percent in its second-quarter net income and predicted further robust revenue growth of more than 20 percent for the full year.
Net income for the second quarter ended June 30 stood at 206 million euros (US$ 179.8 million), up from 116 million euros for the same period last year, the software maker said in a statement. Earnings per share were 0.65 euros, as compared to 0.37 euros per share for the second quarter of 2000, SAP said.
The company reported a quarterly revenue increase of 24 percent year-on-year to 1.85 billion euros along with EBITDA (earnings before interest, taxes, depreciation and amortization) of 450 million euros, an increase of 118 percent from the 206 million euro figure for the second quarter of 2000, SAP said.
SAP restated its upbeat projections for the first nine months of 2001, adding that it expects revenue for the full year 2001 to increase by more than 20 percent. Such a positive future outlook is in stark contrast to the company's U.S. rivals such as Siebel Systems Inc. and i2 Technologies Inc.
On Wednesday, Siebel reported that it had met expectations for the second quarter, but warned that earnings and revenue for the second half of 2001 would not reach expectations. Also on Wednesday, i2 released its second-quarter financial, reporting a loss per share of $0.16.
SAP at the beginning of this year predicted strong growth in 2001 earnings despite weakness in the worldwide software industry. SAP remains relatively insulated from the U.S. economic slowdown, since its sales in the Americas are dwarfed by those in Europe, the Middle East, and Africa (EMEA).
While SAP did report strong revenue in EMEA, up 36 percent in the second quarter to 962 million euros, it also reported healthy growth in Asia -- up 15 percent to 220 million euros -- and, significantly, in the American market. Revenue in the Americas region grew 12 percent to 671 million euros, compared to 598 million euros for the second quarter of 2000, SAP said.
SAP attributed its strong growth to its ability to control ongoing costs.
The company said revenue for its software products rose 22 percent in the quarter to 1.16 billion euros, up from 950 million euros for the same quarter last year. Specifically, mySAP CRM (Customer Relationship Management) products brought in 104 million euros, while the mySAP SCM (Supply Chain Management) line of software generated 150 million euros, SAP said.
This is the second quarter for which SAP released sales figures for its specific software product lines. Compared to the first quarter of 2001, the mySAP CRM product line rose 55 percent from 67 million euros, while revenue from mySAP SCM products grew 46 percent from a first-quarter figure of 103 million euros, SAP said.
SAP also released its full figures for the first six months of 2001, noting that software sales in the first half of the year rose 26 percent to 3.38 billion euros from 2.68 billion euros for the first half of 2000. Its license revenue was 1.1 billion euros, a 20 percent increase from 923 million euros in the first half of 2000, and revenue from consulting was 987 million euros, up 36 percent from 725 million euros in the first half of 2000, SAP said.
In March, SAP announced it had agreed to buy U.S. portal software company, TopTier Software Inc. for $400 million and that it expected to take a one-time research and development charge of no more than $50 million related to the deal in its next quarterly report.
In Thursday's financial report, SAP said that its operating income in the first six months of 2001, before acquisition charges related to TopTier, as well as charges for stock-based compensation, grew 76 percent to 657 million euros compared to 374 million [euros for the first six months of 2000.
SAP's major contracts in the second quarter included Compaq Computer Corp. in the U.S. and Nokia Corp., Siemens AG and the British Broadcasting Corp. (BBC) in Europe, the company said.