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SAP Q3 net income rises 12 percent

SAP Q3 net income rises 12 percent

German software company SAP AG said Wednesday its third quarter net income rose 12 percent, as a drop in revenue was partly offset with a lower tax rate and better margins.
SAP, based in Walldorf, said net income rose to ⁈llion ($644 million) from ⁈llion in the July-September period of 2008.
The company said total revenue fell, however, to ⁈llion from ⁈llion in the third quarter of 2008, a 9 percent decrease.
While the company saw a number of charges including restructuring costs related to job cuts, it saw an increase in operating income because of reversals of provisions it had set up for an acquisition. The net effect of the nonrecurring items was an increase in operating profit of ⁈ion.
SAP said total income from continuing operations rose 6 percent to ⁈llion.
The company's tax rate also fell considerably, to 21 percent from 31.9 percent a year ago, because of acquisition-related items.
SAP said it expects a tax rate for the full year of around 27 percent to 28 percent, lower than the previously expected 29.5 percent to 30.5 percent.
The company said it was still seeing small deals, despite the tight market conditions, and that it was driving multiyear agreements with customers to ensure software and service revenues for longer periods. Still, SAP said it expects service revenues to decline by about 6 percent to 8 percent for the full year, from the ⁈llion in service revenues last year.
"We are pleased to report another quarter of increasing margins despite a decline in revenues. This demonstrates our continued success in maintaining tight cost controls," Werner Brandt, SAP's chief financial officer said in the company's report.
"While we are seeing signs of stabilization in the general environment, the market remains difficult. Third quarter software and software-related service revenues came in lower than we expected mainly because of a particularly challenging environment in the emerging markets and Japan," Brandt said.
Shares of SAP were up slightly at ⁈in Frankfurt morning trading.
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On the Net:
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Updated : 2021-04-19 18:35 GMT+08:00