SAP 2nd-quarter profit up 20 percent

By the Associated Press | July 26, 2011 | 2:29 PM EDT

BERLIN (AP) — Business software maker SAP AG said Tuesday that its second-quarter earnings rose by 20 percent compared with a year earlier as healthy demand fueled a strong increase in revenue.

SAP reported a net profit of euro588 million ($845 million) for the April-June period — up from euro491 million a year earlier. Total revenue was up 14 percent at euro3.3 billion from euro2.89 billion.

Revenue from software and software-related services also rose 14 percent to euro2.58 billion; revenue from software alone rose 26 percent to euro802 million.

The company, based in Walldorf, Germany, said it was lifting its full-year outlook in light of its second-quarter performance and "improved visibility" for the year's second half.

It said it now expects to reach the high end of the revenue and operating profit ranges it had previously given.

Co-CEO Jim Hagemann Snabe said the IT market is seeing a "structural change," with customers "shifting more of their investments toward software as it continues to become a larger and more important component of the overall technology stack."

SAP's first-half net earnings climbed 13 percent to euro991 million from euro878 million a year earlier.

Total revenue for the January-June period rose 17 percent to euro6.32 billion from euro5.4 billion.

Revenue from software and software-related services climbed 17 percent to euro4.91 billion. January-June revenue from software was up 26 percent at euro1.39 billion.