SAP Q3 profits soar on reduction of TomorrowNow provision

The company saw revenue grow by 14 percent in the quarter

SAP reported Wednesday a 14 percent increase in revenue in the third quarter ended Sept. 30, and said its business pipeline continues to remain very strong and companies continue to invest in IT. The business software vendor did not however revise its outlook for the full year 2011, citing the ongoing uncertain macroeconomic environment.

Total revenue in accordance with International Financial Reporting Standards (IFRS) was €3.41 billion (US$4.6 billion at the exchange rate on the last day of the quarter), while software revenue at €841 million grew by 28 percent from the same quarter last year. IFRS software and software-related service revenue was €2.69 billion, an increase of 16 percent.

SAP's third quarter software revenue grew at its fastest rate in a decade because customers are shifting their investments to software that helps them grow and innovate, the company said in a statement.

SAP's profits soared by 150 percent, in accordance with IFRS, after the company reviewed its provision for settlement of the TomorrowNow litigation with Oracle by €723 million, and reflected that sum in the operating profit. U.S. federal judge Phyllis Hamilton reduced the damages in September from $1.3 billion, while giving Oracle the choice of accepting $272 million or seeking a new trial.

The company forecasts full-year 2011 non-IFRS software and software-related service revenue to increase in a range of 10 percent to 14 percent at constant currencies, but expects to reach the high end of the range.

SAP plans to evaluate buying back shares in view of its strong free cash flow generation over the first nine months of 2011. During this period, the company has already bought back 3.6 million shares at an average price of €43.84, mainly in connection with SAP's share-based compensation plans, SAP said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags enterprise resource planningOraclebusiness issuesData managementbusiness intelligencesoftwareapplicationsSAPCustomer Relationship Managementfinancial resultsdata warehousing

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?