SAP Upbeat on Early Results

The enterprise resource planning market may be looking up as vendors announce quarterly results and improved licensing figures.

The enterprise resource planning market may be looking up as vendors announce quarterly results and licensing figures. Following on the heels of PeopleSofts results, German software maker SAP AG Wednesday announced preliminary third-quarter revenues that bodes well for the beleaguered software industry.

SAP, of Waldorf, Germany, said its license sales would likely come in at 430 million euros, or $507 million—around the levels reached in third quarter 2002 and in the second quarter of 2003, officials said. Total revenues are expected to about 1.650 billlion euros, versus $1.702 billion for the same quarter last year.

The excitement over SAPs preliminary numbers stem from its license revenue outlook—often a measure of momentum—that look to best even the most optimistic analyst expectations of 416 million euros, as polled by Reuters.

SAPs third quarter results were supported by better closure rates, particularly in the U.S, and some deals that had been expected to close in the second quarter were signed in the third quarter, according to a statement released by the company.

In addition, SAP said it is finally capitalizing on the potential customers uncertainty stemming from rival Oracle Corp.s hostile takeover bid of PeopleSoft Inc. Both companies make back-office e-business software that competes with SAPs software.

Meanwhile, PeopleSoft, of Pleasanton, Calif., also posted better-than-expected preliminary results Monday.

Citing strong software sales and its recent acquisition of mid-tier e-business software provider J.D. Edwards & Co., PeopleSoft said license revenue, total revenue and earnings per share would likely exceed early September forecasts of $575 million to $590 million in revenues and earnings of 10 cents to 11 cents per share for the quarter.

The company did not say by how much it expects to beat earlier forecasts, but said that the combination of it and JDE is already exceeding expectations.

PeopleSoft will announce third quarter financial results at the end of the month. SAP will announce its third quarter earnings on October 16.

Oracle, of Redwood Shores, Calif., noted a slump in quarterly license sales last month.

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