SAP delivers strong quarter; lands Wal-Mart deal

SAP delivers strong quarter; lands Wal-Mart deal

Summary: SAP reported solid third quarter results Thursday and announced a deal to supply Wal-Mart with financial applications.First the earnings, SAP, which has recently acquired Business Objects and YASU Technologies, reported third quarter revenue of 2.

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SAP reported solid third quarter results Thursday and announced a deal to supply Wal-Mart with financial applications.

First the earnings, SAP, which has recently acquired Business Objects and YASU Technologies, reported third quarter revenue of 2.42 billion euros ($3.45 billion), up 9 percent from a year ago. Net income was 408 million euros ($581 million) in the third quarter, up 10 percent from a year ago. Those results were ahead of expectations.

The ERP giant also claimed that it gained market share in enterprise software based on its analysis of research firm data. SAP reckons that its market share is 27 percent for the four quarter period ending Sept. 30. That's up from 26 percent in the fourth quarter.

In a statement SAP CEO Henning Kagermann said he was pleased with double digit growth across the board.

By region, SAP's Europe/Middle East/Africa sales were the bulk of revenue and up 10 percent. SAP showed growth of 16 percent in Asia Pacific, which is the vendor's smallest market. In the Americas, sales were up 13 percent.

For 2007, SAP reiterated that it expects software and software related revenue to post growth of 12 percent to 14 percent. SAP expects to hit the high end of that range. The company also said it will invest an additional 300 million to 400 million euros ($427 million to $570 million) over eight quarters to build its midmarket business. That investment will put SAP's operating margins in the 26 percent to 27 percent range, down from operating margins of 27.3 percent in 2006.

Separately, SAP said that Wal-Mart has chosen the company's financial ERP software for the retailer's global expansion. Wal-Mart plans to implement SAP in stages with the first phase being completed in 2010. SAP's software will replace legacy systems and integrate with Wal-Mart's internal systems.

Topics: SAP, Banking, CXO, Enterprise Software, Software, IT Employment

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