Mixed Results for SAP in 2Q

By Renee Boucher Ferguson  |  Posted 2003-07-19 Print this article Print

SAP announced a profit of $240 million that was about 18 percent better than the profit in the first quarter, but sales for the quarter fell 8 percent to $1.83 billion.

Software giant SAP AG announced a mixed bag of second-quarter earnings on July 17, as an up-and-coming rival trounced analyst expectations. SAP announced a profit of $240 million (219 million euro) that was about 18 percent better than the profit in the first quarter. It beat a loss of about the same size in the the same quarter last year, when the company wrote off 297 million euro for its tanking investment in Commerce One Inc. However, sales for this second quarter fell 8 percent to $1.83 billion—short of analysts expectations.
At the same time, the new number two software applications provider PeopleSoft Inc. announced license revenues of $112 million, a sequential increase of 38 percent, and total revenues of $497 million, an 8 percent sequential increase.
With its acquisition of J.D. Edwards & Co. finalized Thursday at midnight, PeopleSoft now stands second to SAP in the applications space—just in front of Oracle Corp. Oracle, of Redwood Shores, Calif., is looking to acquire PeopleSoft in order to compete more thoroughly with SAP. That transaction is currently under investigation with the Department of Justice for possible antitrust violations. For now, however, SAP remains the clear leader in the space—and may even benefit from the fracas between Oracle and PeopleSoft. "This is working out very well for SAP," said Todd Inlander, CIO at Fleetwood Enterprises Inc. in Riverside, Calif. "Even though their earnings were not that great, thats a sentiment of the industry as a whole. If someone was about to buy SAP, why wouldnt they? Whereas if they were going to buy PeopleSoft or J.D. Edwards, why wouldnt they wait?" SAP cited new contracts at Coca-Cola Enterprises, Sony Pictures, the European Central Bank and Sharp Corp.

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