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Thursday, July 13, 2006

SAP Misses Expectations; Shares Plunge

German software maker SAP missed analysts' expectations for licence sales, operating earnings and total sales in the second quarter, sending its shares down as much as 10 percent Thursday.

Shares of SAP (down $3.37 to $46.97) were down 7 percent in morning trading, by far the biggest decliner on Germany's blue-chip DAX index, which it helped to drag down by 2 percent.

SAP said sales of new software licenses rose 8 percent to 621 million euros ($790 million), missing all estimates in a Reuters poll of 24 analysts, whose forecasts averaged 675 million euros.
The world's biggest maker of business software held to its full-year targets, which include raising license sales - crucial for bringing in future lucrative maintenance and service contracts - by 15 to 17 percent

Merrill Lynch analysts had warned in a note earlier Thursday that's there were concerns that spending has dried up after recent profit warnings from Business Objects (BOBJ) and WebMethods (WEBM)

Overall, revenue is expected to rise 9% to 2.2 billion euros, the Walldorf, Germany-based software maker said. Analysts polled by Thomson First Call had expected revenue of 2.29 billion euros for the Oracle Corp. (ORCL) archrival.

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