STOCKHOLM (04/19/2000) - Business software supplier SAP AG today reported a 43 percent drop in net income for its first quarter ended March 31, despite a 10 percent increase in revenue.
Net income for the quarter reached 56 million euros (US$53 million), or 0.53 euros per share, as compared to 98 million euros and 0.92 euros, respectively, in the corresponding quarter last year. Revenue rose to 1.18 billion euros, from 1.08 billion euros a year ago.
"SAP was prepared for a challenging first quarter -- and we got it," Henning Kagermann, co-chairman and chief executive officer of the Walldorf, Germany-based software vendor said in a statement.
Investors, however, seemed pleased that recent rumors about a possible first-quarter loss proved wrong. In lunch-time trading today in Frankfurt, SAP shares were trading at 535 euros, up nearly eight percent from yesterday's close.
In response to increasing competition, particularly in the U.S., in the Web-based software market, SAP will continue to invest "considerable resources" to strengthen its MySAP.com offering, Kagermann said.
MySAP.com made up 80 million euros, or 22 percent, of total software license sales in the first quarter, up from 16 percent in last year's fourth quarter, SAP said.
Overall software license revenue increased by only four percent during the quarter, while maintenance revenue rose by 43 percent, as compared to the same quarter a year ago, the company said. Consulting and training revenue, meanwhile, dropped by three percent and 14 percent, respectively.
On a regional basis, first-quarter revenue in the Europe, Middle East and Africa region increased 15 percent to 608 million euros, while revenue in the Americas region fell three percent to 436 million euros, the company said. In the Asia-Pacific region, meanwhile, revenue rose 40 percent to 139 million euros.
Looking forward, SAP expects software sales to pick up speed in this year's second half, Kagermann said in the statement.
SAP, in Walldorf, Germany, can be reached at +49-6227-74-74-74, or via the Web at http://www.sap.com.