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SAP 3Q profit down, company cuts '08 outlook

SAP 3Q profit down, company cuts '08 outlook

Software maker SAP AG said Tuesday that its third-quarter net profit fell despite higher sales. The shaky global economy prompted it to cut its operating margin outlook for the full year and abandon a key revenue forecast.
The Walldorf-based company said its net profit for the July-September period fell 5 percent to 388 million euros ($485 million) from 408 million euros a year earlier.
Total revenues were up 14 percent to 2.8 billion euros ($3.5 billion) from 2.4 billion euros.
SAP said in a statement that it would reduce its operating margin outlook for the year because of the "uncertain economic situation."
SAP said in July that it expected its full-year operating margin to hit the upper end of a 28.5-29 percent range. However, it said it now expects a margin of 28 percent _ and only if it can increase software and software-related service revenues.
SAP abandoned its July forecast that growth in those revenues would hit the upper end of a 24-27 percent range.
"In light of the uncertainties surrounding the current economic and business environment, the company decided to no longer provide a specific outlook for software and software-related service revenues for the full-year 2008," it said.
Co-Chief Executive Henning Kagermann added that "we are assessing business activity continuously, and we are balancing the need for greater efficiencies with steady advancements in our products, customer services and technologies, while addressing customers' most critical business issues."
"This approach has worked well for customers and SAP throughout the up and down economic cycles of the past," Kagermann said. "We've been through uncertainty before, and have always emerged as a better, stronger and more efficient company."