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SAP reports strong fourth-quarter growth

SAP reports strong fourth-quarter growth

SAP released preliminary earnings Monday, showing strong growth across the board.

Beating analysts' expectations and citing strong performance worldwide, SAP on Monday released preliminary fourth-quarter financial results, showing revenue will be about €3.25 billion (US$4.8 billion), a rise of 10 percent compared to the same period last year.

Fourth-quarter software and software-related services revenue will be about €2.48 billion, an increase of about 13 percent year-over-year, according to SAP.

Total revenue for 2007 is expected to grow roughly 9 percent to €10.26 billion. Full-year 2007 software and software-related service revenue is expected to be about €7.44 billion, a jump of around 13 percent over 2006.

Analysts polled by Thomson First Call had predicted on average that total fourth-quarter revenue would come in at $4.7 billion.

Exchange rates took a toll on SAP's results, for as the dollar weakens against the euro, SAP's U.S. sales are worth less. At constant currency rates, fourth-quarter software and software-related services revenue growth will be about 17 percent year-over-year and total revenue growth will be 13 percent compared to 2006, SAP said.

SAP's results were driven by performance across all regions, but the company showed particular strength in the Asia-Pacific-Japan market, it said. Fourth-quarter software and software-related service revenue rose about 27 percent there to €.30 billion and is expected to stand at about €.96 billion for the year, a rise of about 19 percent.

SAP estimated fourth-quarter software and software-related service revenue in the EMEA region will be about €1.40 billion, a jump of roughly 13 percent and €3.98 billion for the year, which is also about a 13 percent rise.

Growth was slower in the Americas, where software and software-related service revenue rose 7 percent in the fourth quarter to €.78 billion and is expected to be roughly €2.5 billion for the year overall, a year-to-year increase of 9 percent, according to SAP.

However, SAP expects its operating margin to fall slightly for 2007, to 26.5 percent, compared to 27.3 percent in 2006. It attributed the decline to investments made in its Business ByDesign ERP suite targeted at the mid-market.

SAP plans to provide more details on its 2007 earnings on Jan. 30.


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