SAP seen lifted by strong U.S. sales

FRANKFURT: An unexpectedly strong fourth quarter in the United States will underpin 2002 results from SAP AG this week, as Europe's biggest software maker cuts costs and shakes up its sales force to ride out a global slump in demand.

SAP issued its now almost standard pre-release of fourth-quarter licence sales figures on January 9, surprising analysts with $1.03 billion in new software sales and a slight rise in overall 2002 revenues.

It also said it expected to meet its target of posting operating margins of at least 21 percent. The company reports detailed fourth-quarter and 2002 figures at a news conference, with the market in a jumpy mood amid growing fears about a war in Iraq and uncertainty over the broader economic outlook.

It has so far given no forecast for business in the current year and after last year's experience, when it was forced to abandon the forecast altogether, analysts are not expecting any firm guidance this time.

"Obviously the market would like a hard number for revenue growth and operating margins but I don't think they're going to give one. The outlook is just too uncertain at this stage," said Commerzbank analyst Ashley Thomas.

The market will also have to do without SAP co-Chief Executive Hasso Plattner, who has been competing in the Cape to Rio yacht race and who has been prevented from attending either the press or analyst briefings, a spokesman said.

SAP shares, which have more than halved since touching a 12-month high of 177.40 euros in March last year, were trading at roughly the level of the start of the year on Wednesday and the results themselves may not provide much of a spur.

"If there were a surprise on operating margins or on the outlook either way, that would make the share move but I think the market has already pretty much priced in a lot of the fourth-quarter impact," Thomas said.

© Reuters