LONDON (Dow Jones) - SAP AG, the world's largest maker of business-management software and rival of Oracle Corp. , on Thursday lifted its 2005 sales and earnings forecasts as it posted a 15% rise in third-quarter profit.

Net income at SAP (SAP) rose to 334 million euros ( $400 million ), with sales up 12.9% to 2.01 billion euros .

SAP shares were recently up 2.9% in Frankfurt .

License revenue, a key indicator, jumped 20.1% to 590 million euros, whizzing past analysts' consensus of 545 million euros . U.S. license sales were especially strong, surging 34% to 199 million euros . That was almost three times the pace of growth in SAP's home market of Germany , where license sales grew to 113 million from 101 million euros .

"The smashed license target reinforces our bullish view on growth," analysts for J.P. Morgan told clients.

Following the strong results SAP raised its earnings and sales forecasts for the year. The company said it now sees license revenue up between 12% and 14% in 2005, compared to an earlier forecast of a 10% to 12% rise.

Bear Stearns analysts, however, said the license outlook seems conservative as it implies just 9% year-on-year growth in the fourth quarter, or 85% of what the company produced in the strong third quarter.

SAP also said proforma earnings should increase to the range of 4.85 to 4.95 euros a share from an earlier view of 4.70 to 4.80 euros a share.

In an interview with CNBC Europe television, SAP Chief Executive Henning Kagermann said the software giant was able to lift 2005 profit forecasts on a combination of better underlying performance as well as a stronger dollar.

SAP now is forecasting its euro exchange rate for the year to be at $1.25 , down from an earlier assumption of $1.30 .

Kagermann said margins should increase in 2006 and 2007 as research and development spending falls back from its 2005 peak.

Though the business spending environment is picking up, Kagermanm said average spending per client is lower.

The company said its worldwide market share rose to 60% at the end of the third quarter from 58% at the end of the second. Its U.S. market share rose to 44% from 41% sequentially.

SAP has been gaining market share from Oracle (ORCL), which has recently gone on a shopping spree, buying Siebel Software Systems, Inc. (SEBL) for $5.85 billion in the quarter. In contrast, SAP has focused on organic growth. Oracle also outbid SAP for retail sector software maker Retek earlier this year.

But Kagermann said the company isn't just keeping its eye on its U.S. rivals.

"In China and India, competitors are coming up, and we're watching that carefully, and not just focusing on Oracle and Microsoft," he said.

(END) Dow Jones Newswires

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