SAP's net income for the quarter ending on 30 September rose 25 percent over the same quarter last year to $294m (£175m), or 81 cents per share. Total revenue slipped 3 percent, to $1.92bn, while software revenue remained nearly unchanged at $504m.
Software revenue in the United States shot up 35 percent in the third quarter compared with the year-ago quarter, the company said. Many of SAP's toughest rivals are US-based companies, such as Oracle, PeopleSoft and Siebel Systems. Oracle is attempting a hostile acquisition of PeopleSoft.
"Our success was the result of excellent sales execution, particularly in the US, combined with a continued focus on improving operating efficiencies," chief executive Henning Kagermann said in a statement.
Customer uncertainty over PeopleSoft's $1.8bn acquisition of J.D. Edwards drove some business to SAP, the company said. "We are beginning to see some wins over the course of the quarter based on the merger climate, and (J.D. Edwards customer) Medtronic was cited as one of those wins," SAP spokesman Jim Dever said.
A PeopleSoft representative countered that J.D. Edwards customers have been very receptive to the merger and have shown little concern. "We don't see any uncertainty there," PeopleSoft spokesman Steve Swasey said. To underline his point, Swasey pointed to PeopleSoft's move recently to raise earnings projections for the third quarter, the first time the company reports combined earnings since the close of the merger.
Medtronic representatives were not immediately available for comment.
SAP, which makes business management applications, said it expects its full-year operating margin to increase by 2 percent compared with 2002, instead of the 1 percent to 1.5 percent increase expected earlier.
