SAP raises 2010 revenue outlook on Q2 growth

FRANKFURT, GERMANY: Germany's SAP raised its forecast for full-year sales on the back of double-digit growth in second-quarter earnings and revenue and signs that global tech spending was picking up.

The business software maker reported a 15 per cent year-on-year rise in the net profit, which stood at 491 million euros ($638.2 million), or 41 cents a share, from 426 million euros, or 36 cents, a year-earlier.

"Customers continue to invest for growth across large, midsized and small enterprises and within many industries," said Bill McDermott, Co-CEO of SAP in a statement on Tuesday.

"We had outstanding growth in strategic markets like the U.S. and we saw continued double-digit growth in key emerging markets in Latin America and Asia."

The company, based in the small southern German town of Walldorf, had said earlier in the year it may adjust its outlook.

It now raised its growth forecast for non-IFRS key software and software-related service revenue to a range of 9-11 percent in 2010 from a previous outlook of 4-8 percent.

It stuck to its full year target for non-IFRS operating margin of 30-31 percent.

In the second quarter, SAP's operating profit was 774 million euros ($999.2 million) on software and software-related service revenue (SSR) of 2.26 billion euros.

Analysts polled by Reuters had on average seen operating profit at 796 million euros, or in a range of 737 million euros to 851 million euros, with SSR sales coming at 2.14 billion euros.

SAP, whose more than 100,000 customers include companies such as McDonald's, Pepsi, Audi, Apple and GE as well as institutions such as Johns Hopkins Hospital, bills itself as the world's leading provider of software to help companies manage supply chains and customer relations.

It competes with International Business Machines Corp, Oracle, Microsoft and Hewlett-Packard Co.

Oracle and Microsoft both reported quarterly results that beat expectations while IBM disappointed investors with a decline in new technology service contracts and a bigger currency impact than expected.