SAP Reports 43 Percent Profit Jump
Business software maker SAP AG said its net profit rose 43 percent in the second quarter on higher U.S. revenues and better margins. The German company earned 414 million euros ($518 million), or 1.35 euros ($1.69) a share, in the second quarter, up from 289 million euros, or 0.93 euro cents a share, a year earlier.
The profit figure beat an average forecast of 356 million euros ($446 million) from analysts polled by Dow Jones Newswires.
Quarterly revenue rose 9 percent to 2.2 billion euros ($2.75 billion) from 2 billion euros a year earlier, the company said.
The company already said last week that software-license sales in the second quarter rose 8 percent to 621 million euros ($777 million) -- far below analysts' expectations -- amid weakness in Europe and Asia and as competition heats up with rivals Oracle Corp. and Microsoft Corp.
On Thursday, SAP said the Americas region "remained the growth driver," with an increase of 18 percent. In the U.S., which accounts for most of its sales in that region, software revenues increased 16 percent.
Second-quarter software revenue in the Europe, Middle East and Africa region rose 3 percent, while it was flat in the Asia-Pacific region.
The operating margin, a key measure of profitability, rose 1.4 percentage points to 24.2 percent, partly because the company's costs rose more slowly than revenue.
Profit also got a one-time boost of 30 million euros ($37.5 million) from a tax settlement.
Looking ahead, SAP, the leading maker of software for payroll, client orders and other business processes, said it expanded its market share and had a strong order book after launching several new products.
"SAP is on track for another successful year," Chief Executive Henning Kagermann said.
While software revenue was "slightly" below its own forecast, "the customer spending environment is stable and customer satisfaction is high," he said.
SAP shares were up 0.5 percent at 148.30 euros ($185.60) on the Frankfurt exchange.