SAP, the world's biggest maker of business software, aims to set a fresh profit record this year as it banks on robust corporate spending on technology.
Investors have worried that they may have overestimated the resilience of corporate tech spending in a deteriorating global economy, especially after SAP's big rival Oracle Corp reported weak quarterly results last month.
But there have been increasing signs that the outlook may not be as dim as some feared. IBM Corp, the world's largest technology services company, brimmed with confidence for 2012 as it posted strong results last week.
We have significant momentum going into 2012, SAP said on Wednesday as it published its full financial results for 2011.
The German company expects operating profit will rise to 5.05-5.25 billion euros ($6.6-$6.8 billion) at constant currencies from a 40-year record level of 4.71 billion in 2011. The outlook compared with a consensus of 4.91 billion euros, according to Thomson Reuters StarMine.
SAP had already reported a better-than-expected rise in fourth-quarter sales and profit on January 13.
It attributed the strong performance to demand for its biggest software products and growing demand for its HANA offering, which allows companies to analyze business data quickly, and said it had won market share overall.
SUCCESS FACTORS BOOSTS TOP LINE
SAP said it expects its 2012 revenue from software and software-related services to increase by 10-12 percent in the full year, of which up to 2 percentage points will be contributed by recently acquired SuccessFactors.
Most analysts had said they expected SAP to aim for 6-10 percent revenue growth from software and software-related services this year.
SAP agreed to buy SuccessFactors for $3.4 billion last month to keep up with rivals in the race for cloud-computing business. Its 2012 earnings will be diluted by the purchase, which will have a positive impact from 2013 on.
We are well positioned to exceed our 20 billion euro revenue target and reach a 35 percent operating margin in 2015, Chief Financial Officer Werner Brandt said.
The company, based in Walldorf near Heidelberg, built its business on large, integrated software systems sold to many of the world's biggest companies, such as Apple, GE, McDonald's and Pepsi.
SAP has about 176,000 customers and bills itself as the world's leading provider of software for managing supply chains and customer relations.
SAP, whose stock has gained about 10 percent over the past year, trades at about 14.5 times 12-month forward earnings, at a premium to Oracle's multiple of 11.4 and IBM at 12.7, according to ThomsonReuters StarMine data.
($1 = 0.7704 euro)
(Reporting by Maria Sheahan; Editing by Dan Lalor)