SAP's License Revenue Shows Improvement

financial story, 1/14/2002

InformationWeek Staff, Contributor

January 12, 2002

1 Min Read

SAP estimates that its software license revenue will exceed $888.6 million for the fourth quarter, better than the previous three months but still a 5% drop from a year ago. Revenue for the full year will be more than 16% greater than the previous year and operating margins for 2001 will improve from 2000's 20% level, the German software company says. SAP will report complete results Jan 23.

Executives warn that customers remain cautious about investing in E-business software. But the improving license-revenue picture is good news for SAP (SAP--NYSE). In October, it reported a disappointing third quarter in which license revenue dropped by 7% from the same quarter the previous year. The results prompted SAP to lower its revenue growth target for 2001 from more than 20% to 15%.

SAP didn't break down quarterly sales by geography, but John Hagerty and Mark Gomes of AMR Research say they expect sales were highest in Europe. SAP also didn't provide sales data by product line, but top sellers in the first nine months of 2001 were CRM and supply-chain management software.

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