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To: SecularBull who wrote (2137)	1/9/2002 10:50:17 AM
From: SecularBull	Respond to of 2339

SAP Shares Jump on Surprise Results By James Mackenzie FRANKFURT (Reuters) - Shares in SAP AG (SAPG.DE) jumped on Wednesday after Europe's biggest software maker unexpectedly outlined fourth-quarter results, which showed software sales had risen faster than analysts had expected. SAP, which had been due to report on January 23, said license sales, the basic measure of how much software it sold, exceeded one billion euros ($891.3 million) in the fourth quarter, well above analyst forecasts of some 781 million euros. Analysts said the results appeared to have been lifted by deals carried over from the disappointing third quarter, when SAP missed market expectations after a sharp fall in U.S. orders in late September. The early announcement follows market talk on Tuesday that the company might be preparing to follow German chipmaker Infineon Technologies AG (IFXGn.DE) by taking advantage of low borrowing costs with a convertible bond issue. A SAP spokesman declined to comment on the bond speculation and analysts were divided about the likelihood of an issue. The software maker said it expected total revenues in 2001 to have grown by more than 16 percent against an earlier forecast of 15 percent growth, with operating margins excluding the costs of stock-related compensation programs and acquisition-related charges set to match the 20 percent achieved in 2000. With the fourth-quarter results not expected for another two weeks, many analysts had not finalized their estimates, but a Reuters poll showed forecasts for software license sales in the three months to December in a range between 436-926 million euros, giving an average of 781 million. SHARES JUMP The news sent SAP shares sharply higher, trading up 5.4 percent at 156.10 euros by 1000 GMT, making it the top gainer in the Dow Jones Eurostoxx tech sector (^SX8E - news), which firmed 0.2 percent. Some reports have suggested SAP would wait until its stock was above 155 euros before issuing a convertible bond. ``It's a very good performance to get 16 percent growth in such a difficult environment and the margins are pretty good as well,'' HypoVereinsbank analyst Friederike Herkommer said. But with the stock now trading at its highest level since late August, some observers cautioned that the potential for further rises was limited. ``It is certainly positive for SAP, but I think most of that is already in the stock price,'' said Andre Koettner, fund manager at Union Investment. ``Microsoft is considerably cheaper and is certainly comparable.'' ABN Amro lifted its rating on SAP to ``Add'' from ``Hold'' saying the outlook for 2002 now appeared better than expected, while CSFB lifted its price target to 180 euros from 160 and repeated its ``Buy'' rating. ING Barings also raised SAP to ''Buy.'' ``CHALLENGING ENVIRONMENT'' In October, SAP cut its sales and earnings targets for 2001, forecasting 15 percent growth in revenues with operating margins of 20 percent, against a previous forecast of over 20 percent sales growth with margins of 21-22 percent. The company, which has a 17,000-strong base of existing customers to rely on, said it expected the market environment to remain ``challenging'' and said it believed companies would continue to invest cautiously in new e-business software. ``It does show that business from existing customers is significantly more resistant to economic weakness than new customer business,'' said Koettner. Like U.S. rivals such as Oracle Corp (Nasdaq:ORCL - news), Siebel Systems (Nasdaq:SEBL - news) and i2 Technologies (Nasdaq:ITWO - news), SAP was hit by a sharp downturn in technology spending late last year, although up until October, it had been one of the few major tech companies consistently to beat forecasts in 2001. Just over one month ago, SAP executives in both Europe and the United States expressed guarded optimism about business in the fourth quarter, saying the company had seen an unexpectedly strong U.S. recovery. SAP, which made its name with centralized systems for large corporate payrolls and accounting, has recently focused on Web-based software to manage purchasing and inventory controls and run sales and customer support services online. In 2000, the group reported full year sales growth of 23 percent to 6.265 billion euros, with operating income of 794 million euros. Full 2001 results are expected on January 23.