SAP cuts provision for TomorrowNow litigation, boosting Q3 profit

Excluding exceptional items, revenue rose 12 percent and operating profit 23 percent, SAP said

SAP said its third quarter revenue rose 14 percent year on year, and operating profit more than doubled according to International Financial Reporting Standards (IFRS), boosted by a recalculation of the sum set aside to settle litigation with Oracle over its SAP's former TomorrowNow subsidiary.

Excluding that change and a handful of other exceptional items, non-IFRS third-quarter revenue rose 12 percent to €3.41 billion (US$4.69 billion as of Sept. 30, the last day of the period reported) and operating profit jumped 23 percent to €1.127 billion, the company said Friday, announcing the preliminary, unaudited results. The company will publish full third-quarter results on Oct. 26, it said.

Currency fluctuations hit third-quarter profit: At constant currency rates, year-on-year non-IFRS operating profit growth would have been 26 percent, SAP said.

The company saw the fastest growth in software revenue, at around 28 percent, with revenue from software and software-related services growing 14 percent.

With only one quarter to go, SAP still says the outlook for the full year is unclear given current economic uncertainties. The company has not changed its previous guidance, repeating that it expects software and software-related service revenue to increase by between 10 percent and 14 percent. It did not offer guidance on software revenue growth, but said companies continue to invest in IT in general, and innovative software solutions in particular.

SAP reduced its provisions for settlement of the TomorrowNow litigation by €723 million, allowing it to report that sum as operating profit. The jury had originally called for SAP to pay Oracle of $1.3 billion, but the judge lowered that to $272 million, giving Oracle the option of seeking a new trial. As Oracle is seeking the right to make an early appeal, the company has not yet announced whether it will accept the reduced sum.

Other exclusions from the IFRS results included a €1 million write-down for deferred support revenue from acquisitions, acquisition-related charges of €110 million, share-based compensation expenses of €17 million and restructuring expenses of 1 million.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesSAPfinancial results

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Peter Sayer

Peter Sayer

IDG News Service
Show Comments

Brand Post

Shining a light on creativity

MSI has long pushed the boundaries of invention with its ever-evolving range of laptops but it has now pulled off a world first with the new MSI Creative 17.

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?