SAP shows first signs of applications market decline

SAP finally showed signs of catching the financial cold that has stricken the rest of the applications software market with second quarter licence sales declining 13 per cent.

The German firm still turned in a profit for the quarter, but the decline in revenues set alarm bells ringing among market watchers. SAP had previously shown none of the enormous collapse in revenues suffered by rivals such as Oracle and Siebel.

But for the second quarter, licence revenue fell 13 per cent to 431 million euros compared to 496 euros for the comparable quarter last year. Financial analysts had been looking for revenues of around 460 million euros. Total revenues fell 8 percent to 1.64 billion euros from 1.78 billion euros in the year-earlier period. Net income was 219 million euros, compared with a loss of 232 million euros a year earlier, when the company took 297 million euros in charges.

?The business environment remains tough, but we executed better than most of our competitors and, more importantly, we once again achieved our goals of improved operating margins and continued market share gains,'' said Chief Executive Officer Henning Kagermann.

SAP said it continues to grow marketshare, claiming 55 per cent of the global market for business planning software on a rolling four-quarter basis.

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