Europe's biggest software group SAP AG continued to preach caution about prospects for 2002 on Wednesday but forecast 15 percent growth in sales with operating margins rising to at least 21 percent.
"SAP expects 2002 to be another challenging year, as software sales trends continue to be unsettled in a tough economic environment," the company said in a statement.
The statement struck a measured note following recent upbeat comments from U.S. rivals including Oracle Corp. and PeopleSoft but SAP said it expected software sales to begin to pick up more strongly in the second half of the year.
"The outlook is a lot higher than anyone had expected. However it is going to be very much second half loaded," Lehman Bros analyst Coleen Kaiser said.
"That makes sense but on the other hand it's probably a bit of a leap of faith for a lot of people and it's going to be very dependent on economic conditions," she said.
After the surprise release of better-than-expected software sales figures on January 9, the statement confirmed SAP's recovery from a disappointing third quarter, when it missed market forecasts after a sharp fall in U.S. orders in September.
"The licence revenues were very good, although SAP says that a 15 percent sales rise is challenging. The revenues overall were very good," said Ernst Konrad, fund manager at Activest in Munich. "The positive momentum continues."
Sales in the fourth quarter to December rose 7 percent over the year earlier to $2.05 billion, while operating profit before charges for staff stock programs and acquisition costs fell 8 percent.
Net profit, adjusted for acquisition costs and the impact of SAP's 20 percent stake in loss-making U.S. online marketplace specialist CommerceOne, climbed slightly.
Fourth quarter sales in the Americas region, including the United States, rose 13 percent at constant currency rates, while sales in Europe, the Middle East and Africa were up 7 percent.
"Europe was solid, as anticipated, and the U.S. exceeded our expectations and continued to gain market share," co-Chief Executive Henning Kagermann said in a statement.
Analysts had been expecting results would be boosted by U.S. sales and deals carried over from the third quarter but even so, the extent of the increase was above expectations.
LICENCE SALES UP
Licence sales -- the basic measure of how much software the company sold -- dipped 2 percent in the fourth quarter from the strong year-ago period to $911.5 million, in line with the forecast it gave earlier this month.
The Walldorf-based group also made progress in its drive to overtake U.S. rival Siebel Systems in customer relationship management (CRM) software, used to run sales and customer support services online.
"CRM looked really strong, supply chain management looked really strong. There really aren't any holes in the Q4 numbers," Lehman Brothers' Kaiser said. "I think Siebel's going to be a bit scared by the CRM numbers."
After expanding out of its traditional enterprise software for large centralised corporate accounts, SAP established itself last year as one of the leaders in electronic commerce software, in the process leaving many once-feted U.S. rivals in its wake.
Both CommerceOne and Ariba Inc posted gloomy results on Tuesday, emphasising the gap which industry leaders like SAP, Oracle and Siebel have opened up.
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