Europe's biggest software maker, SAP, which employs 550 people at its customer support centres in Dublin and Galway, beat expectations for licence sales in its third quarter as it continued to gain market share and said it would keep its focus on growth.
For the first time in years, business picked up in European countries outside Germany as SAP defied recent cautious market outlooks from competitors and profited from uncertainty created by a takeover battle between its two main rivals.
SAP reported yesterday that software licence sales came in at €491 million for the quarter to the end of September, compared with an average forecast of €466 million in a poll of 22 analysts.
Earnings before interest and tax, adjusted to exclude stock-based compensation and acquisition costs, were at the high end of forecasts, rising 12 per cent to €475 million on overall sales that were up 8 per cent to €1.8 billion.
Adjusted net income grew 16 per cent to €302 million.
Despite the better-than-expected results, SAP kept its forecast for the full year of a 10 per cent rise in software sales unchanged.
"It looks like the management prefers to be cautious rather than create room for disappointment in these volatile markets," said Mr Peter Jarvis, European fund manager at F&C Asset Management in London.
SAP's chief executive, Mr Henning Kagermann, defended his decision not to raise the company's outlook.
"If we achieve this, and we will achieve it - and if you look at how competitors are struggling and still the market is tough - I think it's a big achievement," he said in an interview.
He added that he saw double-digit growth for years to come and that SAP would continue hiring after increasing its workforce by more than 8 per cent this year.
Mr Kagermann said he wanted to maintain growth and profitability, aiming to increase SAP's adjusted operating profit margin by one percentage point this year and a further three points longer-term, but that growth was more important. - (Reuters)
