SAP Posts More than Double Q3 Profit over Lower Legal Provisions

October 27 00:00 2011

New York, October 26 (RainbowNewsLine.com) – Lower provisions for damages to be paid to Oracle Corp (NASDAQ: ORCL) in a copyright lawsuit have helped SAP AG, the largest maker of business management software, to post more than double profit for Q3 as its net income climbed to 1.25 billion euros ($1.7 billion) from 500 million euros a year earlier.

SAP reduced its provision of paying damages in a legal dispute over copyright infringement by its TomorrowNow unit by 723 million euros.

SAP had pre-released some earnings figures on Oct. 14. It reiterated its outlook and said it will reach its highest cash flow ever this year, allowing it to “further evaluate” buying back shares. Co- Chief Executive Officer Bill McDermott said in a statement that “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.”

SAP shares rose 0.6 percent 42.84 euros in Frankfurt trading yesterday. The stock is up 12 percent this year, giving the company a market value of 52.6 billion euros. Oracle has gained 3.4 percent this year. SAP’s software sales have outpaced estimates in the last two quarters and it is now counting on clients buying software to reduce costs or raise efficiency even as the economy slows.

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