Friday, October 30, 2009

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SAP cuts sales forecast

SAP AG, the world’s biggest maker of business-management software, cut its sales forecast for the year as clients in emerging markets and Japan spent less than it anticipated, sending its stock to the biggest drop in a year.

SAP, which today reported a less-than-expected 12% increase in third-quarter profit, cut its sales outlook for the second time this year. Software and related service revenue will fall between 6 percent and 8 percent in 2009 at constant currencies and excluding a writedown from acquiring Business Objects SA, it said in an e-mailed statement. In July, it had predicted a drop of 4 percent to 6 percent.

“These are really disappointing figures, much worse than expected,” said Ulf Moritzen, a fund manager at Aramea Asset Management AG in Hamburg, which oversees about $1 billion, including SAP shares. “Clients are obviously still reluctant to invest in software, so cost-cutting is the only option SAP has at the moment to safeguard profitability.”

SAP, which counts Apple Inc., Coca-Cola Co. and Wal-Mart Stores Inc. among its customers, said although it’s seeing some “signs of stabilization, the market remains difficult.” Last month, SAP’s biggest rival, Oracle Corp., reported sales, including revenue from acquired companies, slid 6.6 percent to $5.06 billion in the three months to August 31.

In the third quarter, SAP faced “challenging conditions in some of the emerging markets and in Japan,” Chief Executive Officer Leo Apotheker said in an interview on Bloomberg TV today. “We adjusted our guidance because 2009 is a very peculiar year, it’s very hard to predict.”

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