SAP Reports Upbeat Results

By Renee Boucher Ferguson  |  Posted 2003-10-16 Print this article Print

UPDATED: Taking advantage of the PeopleSoft vs Oracle fracas, SAP made gains in U.S. sales in its third quarter.

E-business software developer SAP AG announced today an upbeat end to its third quarter, with a particularly good showing in the United States. Possibly benefiting from the very public takeover brawl between rivals Oracle Corp. and PeopleSoft Inc., SAP said its market share in the U.S. climbed 35 percent during the third quarter—and it would have been 54 percent, considering a constant currency.
Software revenues for the third quarter came in at $502 million, versus $504 million for the same quarter last year—a fairly flat reporting until a consistent currency basis is considered. In that case, software revenues for the third quarter were up seven percent compared to last year, officials said.
SAPs CEO, Henning Kagermann, said in a statement that SAP delivered strong results despite a continued tough market environment. "Our success was the result of excellent sales execution, particularly in the US, combined with a continued focus on improving operating efficiencies." Net income for the company increased 25 percent to $292 million, a sharp contrast to last years third quarter net income of $234 million, while operating income increased 23 percent for the third quarter to $479 million, versus $389 million for the same year-ago quarter. Total revenues for the quarter were down to $1.91 billion, a three percent decrease over the third quarter in 2002, reported at $1.97 billion. Looking at a constant currency rate, though, puts total revenues at an increase of three percent compared to last years third quarter. SAP is one of the few companies that break out revenue by product line—a good indicator of market sector traction. For the third quarter of 2003, supply chain management (SCM) software revenues for the quarter were up seven percent to about $118 million, versus 2002s $110 million. SCM sales represented about 23 percent of SAPs total software revenues. As a contrast, mySAP customer relationship management (CRM) software sales reached about $103 million, down four percent from the same quarter last year that came in at $108 million and represented 21 percent of total software revenues. SAP, of Walldorf, Germany, also reported its nine-months-ending results that included a total revenue decrease of six percent, to $5.6 billion, versus 2002s $5.9 billion in total earnings. On a constant currency basis, however, SAPs nine month earnings look a little more positive, with a two percent increase. Kagermann said the company remains committed to investing in strategic areas to help drive innovation—though he did not specify which areas the company will look to. Editors note: This story has been updated to include figures in dollars.

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