SAP defies technology gloom with stronger software sales

 
City A.M. Reporter
GERMANY’S SAP, the world’s largest maker of business software, yesterday delivered a stronger-than-expected rise in profits led by robust sales, defying a weakening trend that has hit rivals.

SAP said its software revenues, when measured by IFRS accounting standards, rose 19 per cent to a record €1.06bn for the second-quarter.

It had previously predicted a 15 to 20 per cent increase at constant currencies.

Quarterly operating profit before special items rose 15 per cent to €1.17bn.

SAP shares, down 9.4 per cent in the last three months, traded up 2.6 per cent at €47.50.

“The results are much better than the market had come to expect recently,” one stock market trader said.

The company didn’t give an outlook and the general feeling is that technology spending might weaken further as the Eurozone’s debt crisis deepens and US job creation stagnates.

There has been plenty of evidence of a weak second-quarter in the tech sector. US software firms Qlik Technologies and Informatica Corp as well as Indian software services provider Infosys have issued estimates below market forecasts.