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Summary: Enterprise firm SAP's Q3 results have shown strong growth in three key areas, and software sales remain strong.

By for Between the Lines

SAP has reported its third quarter earnings including an increased software revenue of 17 percent, and said the fourth quarter will be in line with current estimates.

The enterprise software company's results show strong trading in the Americas, and the firm enjoyed strong growth in cloud services, SAP HANA and mobile technology.

SAP reported third quarter earnings of 618 million euros ($802m), or 0.52 euros ($0.67) a share -- in comparison to a profit of €1.25 billion ($1.62bn) in 2011 -- on revenue of 3.95 million euros ($5.13m), up 16 percent from a year ago. Non-IFRS earnings for the quarter were 0.70 euros a share compared to 0.72 euros in the previous year, a 3 percent decrease.

Profit before tax was €822 million ($1.06bn) in comparison to €1.76 billion ($2.28bn) in the prior year. Under non-IFRS, profit after tax was €836 million compared to €860 million in FY2011.

Third quarter software revenue increased by 17 percent to €1,026 million ($1.33m). Support services revenue increased to €2.1 million ($2.7m), an increase of 16 percent based on FY2011's€1.812 million ($2.4m). 

sap earnings q3 2012 highlights

Cloud-based subscriptions and support saw the largest boost in growth; rising from a revenue of€4 million ($5.2m) in Q3 2011 to €63 million ($81m) in the current fiscal year -- a fourteenfold increase in 12 month new and upsell subscription billings.

SAP HANA revenue was €83 million ($107m), keeping the company on track to reach full-year expectations of approximately €320 million ($415m). Mobile revenue tells the same story -- the firm expect to reach a revenue of €220 million ($285m) by the end of the fiscal year, and revenue has currently reached €48 million ($62m).

SAP's operating profit is reported to be €921 million, a decrease of 48 percent in comparison to Q3 2011's €1.76 billion. Non-IFRS operating profit increased 10 percent, bringing the figure up to€1.24 billion. The IFRS operating margin was 23.3 percent, a decrease of 28.3 percent from 2011.

However, as SAP noted within its earnings release, discontinued TomorrowNow activities has resulted in a significant profit -- boosting the IFRS operating margin by 21.2 percent, and so the 2012 and 2011 IFRS profit margin values are not completely straightforward and comparable.

The company continues to expect full-year 2012 non-IFRS operating profit to be in a range of 5.05 billion euros-5.25 billion euros at constant currencies.

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