Update: SAP first-quarter profit climbs 10 percent
SAP results follow turbulent quarter that saw it sued by Oracle, reorganizing its execs, and battling slower revenue growth
Follow @infoworldSAP has posted its financial results following a turbulent quarter for the company, reporting a 10 percent jump in profit on increased sales of its software and support services.
Net income for the first quarter was €310 million ($413 million as of March 31, the last day of the period reported), up 10 percent from €282 million for the same quarter last year, SAP said on Friday.
Total revenue climbed 6 percent to €2.17 billion, from €2.04 billion in the first quarter of 2006. Revenue from software and related services increased 9 percent to €1.52 billion, from €1.39 billion a year earlier.
The Walldorf, Germany, company ended the quarter with 8,500 customers on its SAP ERP (enterprise resource planning) applications, more than double the number a year earlier, while sales of its NetWeaver integration software climbed 40 percent to €156 million, SAP said.
SAP CEO Henning Kagermann called the figures "a very good start" to 2007. "We see strong demand in the Americas ... Asia is strong as always, and Europe is a mixed picture," he said in a conference call.
The results suggest that SAP has lifted its software business after a disappointing end to 2006, when growth was sluggish in the Americas and Asia-Pacific.
For the first quarter, sales from software and related services increased 12 percent in the Americas, to €570 million, SAP said. Asia-Pacific sales increased 4 percent to €197 million, while sales in Europe, the Middle East and Africa increased 9 percent to €752 million.
The gains overseas were dampened by the strength of the euro against other currencies, which Kagermann argued should be taken into account when comparing growth rates between European and U.S. companies.
"The slide in the dollar has masked what would otherwise have been a strong riposte to all that has gone before," commented David Bradshaw, an analyst at Ovum Ltd. in the U.K.
The results follow a busy quarter for SAP in which it was sued by its biggest rival and lost one of its most prominent software strategists. The company has also been battling slower revenue growth as it competes fiercely with Oracle.
On March 22 Oracle filed a lawsuit against SAP, accusing it of "corporate theft on a grand scale." Workers at SAP's TomorrowNow subsidiary allegedly stole documents and software that Oracle uses to provide support services. Its goal was to offer cut-rate support service to Oracle customers, according to Oracle.
Kagermann said Friday that SAP did "nothing wrong" and does not plan to settle the case with Oracle. Instead it will begin its formal defense in the coming weeks, he said.
