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Better-Than-Expected U.S. Sales Help SAP Pick Up Profits

The ERP vendor's operating expenses dropped about 9% to $1.44 billion, helping to boost net income.
SAP posted fairly flat financial results for its third quarter, but it picked up a bit more profit because of cuts in operating expenses and better-than-expected sales in the United States.

The enterprise-resource-planning vendor reported revenue of $1.92 billion for the quarter ended Sept. 30, compared to $1.98 billion the same time a year ago. Software revenue was $503.9 million, a marginal decrease compared to the $506.2 million recorded in the third quarter of 2002.

SAP's operating expenses dropped about 9% to $1.44 billion, helping to boost its net income to $293.2 million, compared with $235.0 million the same quarter a year ago.

Though SAP's revenue was down slightly in the Americas region, SAP says it did make gains in the U.S. market, increasing revenue by 35% compared with the third quarter of 2002.

"SAP delivered strong results despite a continued tough market environment," CEO Henning Kagermann said in a written statement. "Our success was the result of excellent sales execution, particularly in the U.S., combined with a continued focus on improving operating efficiencies."

Third-quarter contracts that contributed to SAP's revenue include Brookshire Grocery, Hyundai, Medtronics, Olympus Korea, Portugal Telecom Group, and The Washington Post.