SAP expects tough 2002

January 23, 2002 Posted: 0825 GMT

LONDON (CNN) -- Germany software company SAP expects a tough year ahead but forecasts sales growth of 15 percent as demand picks up in the second half of 2002.

The world's biggest business software publisher issued a cautionary statement as it said on Wednesday its forth-quarter net income fell 13 percent to 319 million ($283 million) from 367 million in the same period a year ago.

SAP surprised the market earlier this month releasing better than expected preliminary sales figures and estimated growth of 16 percent in 2001. Full-year sales actually rose 17 percent to 7.34 billion.

"Europe was solid as anticipated, and the U.S. exceeded our expectations and we continued to gain market share," said Co- Chief Executive Officer Henning Kagermann in the statement.

Licence revenue -- the basic measure of how much software the company sold -- dipped 2 percent to 1.03 billion, in line with the forecasts.

	SAP expects 2002 to be another challenging year, as software sales trends continue to be unsettled in a tough economic environment
	SAP company statement

The Walldorf-based software, which has emerged as one of the dominant forces in Internet-based business-to-business software with its mySAP.com e-business product, was forced to cut its sales and operating margin in October after many corporate customers delayed orders amid concerns about the state of the deteriorating global economy.

Unlike the upbeat statement's from rivals, Oracle and PeopleSoft of the U.S., SAP was more cautious about 2002, saying it expected software sales to begin to pick up more strongly in the second half of the year.

"SAP expects 2002 to be another challenging year, as software sales trends continue to be unsettled in a tough economic environment," the company said.   

Fourth quarter sales rose 7 percent to 2.32 billion, while operating profit before charges fell 8 percent to 613 million. Sales in the Americas region, including the United States, rose 13 percent to 864 million, while sales in Europe, the Middle East and Africa were up 7 percent at 1.2 billion.

SAP's operating margin -- profit minus the cost  -- is expected to rise at least 1 percentage point over the 20 percent achieved last year, the company said.

SAP stock, which has soared more than 70 percent since hitting a low of 90.50 euros in late September, rose 1.7 percent to 158.60 in early Frankfurt trading on Wednesday.