SAP announced strong fourth-quarter 2010 revenues and solid predictions for 2011 but is still struggling with the fallout of its Oracle lawsuit.
SAP announced solid quarterly results and financial
forecasts for 2011, even as the company seeks to put a bruising court battle
with Oracle in the rearview mirror.
For the fourth quarter 2010, SAP earned about $5.54 billion in total revenues, with an
after-tax profit of around $597 million. While that
represented a 27 percent year-over-year increase for revenue, it also marked a
36 percent reduction in profit over the same period. Software and
software-related service revenue totaled $4.4 billion,
a year-over-year increase of 28 percent.
"Our strong performance and business outlook for 2011
demonstrate that SAP is confident about achieving double-digit growth and
continued margin expansion," Werner Brandt, SAP's CFO, wrote in a
statement posted on SAP's Website
SAP's earnings release also drilled into the company's
recent court battle against Oracle. "SAP has great respect for the U.S. legal
system and Court decisions," it read
"However, SAP believes that the amount awarded by the jury in Oracle vs.
SAP/TomorrowNow is disproportionate and wrong."
Oracle's lawsuit accused SAP's now-shuttered TomorrowNow
division of illegally downloading support documentation and more than 8 million
instances of customer-support software. SAP apologized for TomorrowNow's
conduct, even as the Oakland, Calif.,
federal district court leveled a $1.3 billion judgment. Despite SAP agreeing to
pay some $120 million in court costs to Oracle, the
latter asked the court for another $211 million in interest
SAP apparently plans to file post-trial motions in coming
weeks, seeking to reduce the damage award. "Depending on the outcome of the
post-trial motion process, SAP may consider an appeal," reads the earnings
statement. "Because the motions have not yet been filed and the outcome of the
motions remains uncertain the amount by which the jury award would be reduced
cannot be reliably measured at this time."
As with all companies in the enterprise software business,
SAP is constantly seeking out new ways to remain competitive within a rapidly
changing landscape. Its $5.8 billion acquisition of Sybase, announced in May
2010, was widely seen as a way for the company to not only create a new revenue
stream, but also consolidate and expand its offerings via Sybase's mobile
technology. In theory, that would allow the company to stay competitive with
Oracle, and try to fend off companies such as Microsoft that are pouring more
resources into the enterprise space.