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SAP lowers revenue target
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October 18, 2001: 3:45 a.m. ET
German B2B software house lowers revenue target, to cut more jobs
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LONDON (CNN) - SAP, the world's biggest business software publisher, lowered its 2001 revenue target on Thursday and said it would cut more jobs.
Software and technology companies have been suffering from falling demand as a U.S.-led economic slowdown pushes many corporate customers to delay or cancel orders until they can see signs of a recovery.
"Due to changes in corporate software spending timetables, SAP has updated its full year outlook and now sees full year revenues growing by around 15 percent," said the German company.
SAP, which has emerged as one of a the dominant forces in Internet-based business-to-business software with its mySAP.com e-business product, had previously forecast full year sales growth of more than 20 percent.
SAP (FSAP) shares plunged 15 percent to  108.48 in early Frankfurt trade on Thursday.
The Walldorf-based software house said third-quarter net income fell 11.4 percent to 78 million ($71 million), or 0.25 a share, from 88 million, or 0.28 a share, in the same period a year ago. Sales rose 16 percent to 1.65 billion.
Analysts polled by Reuters forecast net profits between 66 million and 299 million and revenues of between 1.5 billion and 1.8 billion. The company did not say how many jobs it would lose.
Even before last months terror attack, which raised the prospects of a recession in its key U.S. market, many observers had been sceptical about the company's ability to meet its sales target as its rivals warned otherwise.
Among its rivals, electronic business software provider Siebel Systems (SEBL: down $4.16 to $17.38, Research, Estimates) reported on Wednesday third-quarter earnings down by half. And i2 (ITWO: down $1.40 to $4.29, Research, Estimates) posted a $5.5 billion loss and said it would cut 20 percent of its staff.
In the U.S., the world's biggest software market where SAP generated 40 percent of its second quarter revenues, sales rose nine percent in currency-adjusted terms to 613 million following a weak rise in the previous quarter.
Licence revenues -- the basic measure of how much software the company sold -- fell seven percent to 447 million from 480 million a year earlier.
"We are pleased to have met our guidance for the first nine months of 2001 although we had thought that software licence sales for the quarter would be stronger," said co-Chief Executive Henning Kagermann said. 
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