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Technology Stocks : SAP A.G. -- Ignore unavailable to you. Want to Upgrade?

To: Informatiker who wrote (2704)	10/20/1998 7:33:00 AM
From: Tom Gebing	Respond to of 3424

SAP Sees Slowing Demand For Year 2000 Software In 4Q Dow Jones Newswires MUNICH -- Although SAP (SAP) expects demand for its core Year 2000 software to slow down in the fourth quarter, the software maker Tuesday maintained its positive forecasts for full-year sales and profit. SAP Co-Chairman Henning Kagermann reiterated the group's earlier forecast of 40% sales and 30% to 35% pretax profit growth in the full year. Kagermann spoke at the group's press conference in Munich. The slowdown in demand for its Year 2000 R/3 software is also due to the fact that the software has an average installation period of 18 months. This means that demand for that type of software may decline rapidly as companies that haven't bought the software yet won't have it installed in time for the year 2000. - - 20/10/98 08-56G Meanwhile, the continuing economic crisis in Japan took its toll on SAP's third-quarter sales in the Asia-Pacific region. They dropped 20% to DEM161 million from DEM200 million in the year-earlier period, SAP said. Commenting on global sales, Kagermann pointed to poor exchange rates in the third quarter, which hurt sales growth by 7%. Third-quarter group sales were up around 43% to DEM2.0 billion from DEM1.4 billion in the year-ago period. Nine-month sales rose around 54% to DEM5.9 billion from DEM3.8 billion in the year-ago period, SAP said. In the U.S., SAP recorded a sales increase of 65% to DEM2.7 billion, while sales in Europe, Middle East and Africa grew 58% to DEM2.6 billion. Asia accounted for DEM537 million in sales in the January-to-September period, up only 4% on the year, the software maker said. However, the increase in overall costs almost matched sales in the nine-month period, SAP said. They rose 58% on the year to DEM4.9 billion from DEM3.1 billion, including costs stemming from the Star stock-option program for employees. -By Angela Cullen; 49-69-25 616 500; acullen@ap.org -0- 20/10/98 09-41G

To: Informatiker who wrote (2704)	10/20/1998 7:37:00 AM
From: Tom Gebing	Respond to of 3424

DJ 05:52 [SAP] SAP '98 SALES -2: 3Q ASIA-PACIFIC SALES DN 20% ON JAPAN WOES DJ 04:56 [SAP] SAP '98 SALES -2: INSTALLATION ALSO CAUSES SOFTWARE SLOWDOWN DJ 04:25 [SAP] CORRECTION: SAP STAR PROGRAM 3Q COSTS DEM9M, NOT DEM9B DJ 03:28 [SAP] SAP/9 MOS -3: 3Q STAR COSTS ABOVE ANALYSTS' FORECASTS DJ 02:51 [SAP] SAP 9 MOS GRP PRETAX PFT UP 45% TO DEM1.2 BLN DJ 02:40 [SAP] SAP/9 MOS -2: COST RISE COULD SIGNAL COMING SLOWDOWN

To: Informatiker who wrote (2704)	10/20/1998 11:41:00 PM
From: Wigglesworth	Read Replies (1) \| Respond to of 3424

SAP's Pretax Profit Gained 50% In Quarter Despite Fall in Asia Sales By MATTHEW ROSE Staff Reporter of THE WALL STREET JOURNAL SAP AG's pretax profit rose 50% in the third quarter despite weak Japanese sales and adverse currency conditions, the German software company said. SAP reported profit of 376 million marks ($230.6 million), up from 251 million marks in the year-earlier quarter, in line with expectations. Sales rose 43% to two billion marks from 1.4 billion marks. Because Walldorf-based SAP had primed the market by releasing its sales figures earlier this month, analysts focused on the details in the company's numbers, especially its fast-rising costs and signs that the once-booming market for its enterprise software is slowing. These broader concerns drove SAP's stock down 2.6%. In Tuesday trading on the Frankfurt Stock Exchange, SAP shares slid 20 marks to 750 marks, putting them 43% below their 1998 high. In composite trading on the New York Stock Exchange Tuesday, SAP American depositary receipts fell $2.625 to $36.875. The numbers are "consistent with the industry slowing down," said Charles Phillips, a software analyst with Morgan Stanley Dean Witter in New York. Hasso Plattner, SAP's co-chairman, said worries about an industry slowdown are overblown, despite a third-quarter profit warning from SAP's Dutch rival Baan NV. "We cannot ignore that our colleagues are reporting having difficulties, but we don't see weaker demand for [our] software," he said in an interview. An Extraordinary Gain SAP said its third quarter would have been stronger if its Asian-Pacific sales, of which Japanese sales are a major component, hadn't fallen 20% from a year earlier, to 161 million marks. Mr. Plattner said, however, that growth could pick up in Japan within three quarters. SAP also added that sales growth would have been seven percentage points higher stripping out the effect of the dollar's weakness against the mark. SAP's profit, however, was boosted by an extraordinary gain of 53 million marks, mostly relating to currency-hedging activities. Costs rose ahead of sales, gaining 46% to 1.7 billion marks, partly because of SAP's aggressive hiring this year, as well as the costs of its employee-incentive scheme. But some analysts also noted that revenue from the sale of software licenses, a key indicator of the company's performance, increased just 29% in the third quarter, compared with 78% growth a year earlier. Analysts and investors have voiced concern that potential SAP customers are spending money to fix their Year 2000 problems, or just aren't spending any money at all, instead of investing in expensive software systems. Jochen Klusman, an analyst at Bank Julius Baer in Frankfurt, pointed out that the number of new SAP customers fell 16% in the quarter. "That was a significant decline," he said. Taking SAP's own forecast of a 40% increase in sales for the whole of 1998, the next quarter could see growth of only around 16%, although most analysts expect the company to beat its target. Indirect Sales Mr. Plattner said the numbers also were affected by typically slow business in Europe during the August holiday season, as well as a shift in sales through indirect resellers. Including indirect sales, Mr. Plattner said, the number of new customers grew 28% in the first nine months of the year. Other analysts pointed out that SAP's business is still stronger than many of it's competitors, some of whom have stumbled recently. SAP pointed to 55% sales growth in the U.S. and 36% sales growth in Germany in the third quarter as proof of how the company can continue growing in saturated markets. The company has launched a range of products for the fast-growing "front-office" automation market in addition to its traditional "back-office" products. "I don't think SAP is totally immune to a global economic slowdown," said Devika Malik, an analyst with J.P. Morgan in London. "But fundamentally it's still strong."