German Watchdog Probes SAP Profit Revision

Germany's state supervisory office for share trading is investigating whether business software maker SAP violated share trading law, the Berliner Zeitung daily newspaper said Monday.

Germany's SAP said Saturday that it had to revise down its reported first-half net profit, taking into account losses by 20-percent-owned Commerce One.

In an advance release of an article from its Tuesday edition, Berliner Zeitung said the supervisory office would examine whether SAP should have issued the profit revision earlier as it could influence the company's share price.

There was no comment immediately available from the supervisory office.

A spokesman for SAP says the company saw nothing in the revision that could have moved its share price and required it to issue a formal announcement over the stock exchange's electronic information service.

Reuters reported the profit revision after confirming the contents of a newspaper article with SAP on Saturday.

Analysts say the revision was a non-cash accounting charge, below the operating line and did not affect the group's profitability.

"It makes no difference to the cash flow or the profitability of the business," says Credit Suisse First Boston analyst Matthew Hammond. "We consider it largely immaterial."

SAP on Monday clarified the downward revision to its first-half net profit was around $90 million, rather than the $78.12 million figure a company spokesman gave on Saturday.

The revision came after Commerce One, which makes software that powers online marketplaces, on Thursday reported a greater than expected net loss of $2.06 billion in the second quarter, including charges. It cited in part the global economic slowdown.

SAP also reported its second-quarter and first-half results on Thursday.

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