SAP profit climbs 10 percent on new license growth

SAP reported a 10 percent jump in its second-quarter net income on Thursday, helped by a sharp increase in revenue from new software licenses.

Net income for the quarter was €449 million (US$605 million as of June 30, the last day of the period being reported), up from €415 million in the second quarter last year. That was equal to earnings of €0.37 per share, up from €0.34 per share a year earlier.

Revenue from new software licenses climbed 18 percent to €715 million, from €604 million last year. Total revenue, including maintenance fees, support and other services, climbed 10 percent to €2.4 billion, up from €2.2 billion in the second quarter of 2006.

The results were better than some analysts expected and showed that SAP is continuing to add new customers even while its main rival, Oracle, grows its applications business through acquisitions. For the comparable period, its financial quarter ending May 31, Oracle increased revenue from new applications licenses by 13 percent, to $641 million.

In SAP's biggest market -- Europe, the Middle East and Africa -- total revenue was up by 12 percent, to €1.27 billion. Growth in the Americas, dragged down by the strong euro against the U.S. dollar, was just 6 percent, to give revenue of €853 million. SAP continues to grow fastest in Asia, where revenue climbed 20 percent to €304 million.

CEO Henning Kagermann called it "an excellent quarter." SAP will continue to invest heavily in new products for the midmarket, he said in a statement. The company is spending €300 million to €400 million over two years to develop a new suite of on-demand applications, intended to offset slower growth from large enterprises.

The results come as SAP continues to battle Oracle in U.S. court for alleged corporate theft. Oracle charged that SAP's TomorrowNow subsidiary hacked into Oracle's customer support Web site and downloaded software fixes and support materials for Oracle's PeopleSoft and JD Edwards applications. SAP planned to use the materials to offer cut-rate services to Oracle customers, according to Oracle's lawsuit.

In its response last month, SAP admitted that TomorrowNow employees had made some "inappropriate" downloads of Oracle materials. But it played down the extent of the transgressions and said SAP itself did not have access to the materials. A case management conference is set for September.

Insider Tip: 12 easy ways to tune your Wi-Fi network
Editors' Picks
Join the discussion
Be the first to comment on this article. Our Commenting Policies