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Thursday, 18 October, 2001, 11:42 GMT 12:42 UK
SAP shares plunge 17%
SAP front page
SAP downgrades its full year forecast
Shares in the German software giant SAP plunged by almost 17% in early trade after the company reported a profit fall and cut its 2001 sales forecast.


Due to changes in corporate software spending timetables, SAP has updated its full year outlook and now sees full year revenues growing by around 15%

SAP
SAP, Europe's leading maker of e-business software solutions, said its net profit fell 11.4% to 78m euros (48.6m; $70.9m) in the July to September quarter, which was at the lower end of analysts expectations.

SAP also said it was only expecting a 15% increase in sales for the full year, rather than the 20% it had been predicting earlier.

Meanwhile, Franco-Italian STMicroelectronics, Europe's biggest chip maker, posted an 11.8% decline in third-quarter sales and forecast a flat year end, as orders dried up.

Strength sapped

"Due to changes in corporate software spending timetables, SAP has updated its full year outlook and now sees full year revenues growing by around 15%," the company said in a statement.

Sales for the third quarter were up 16% to 1.65bn euros.

SAP said it would "speed up cost-cutting measures, including adjusting the level and mix of employees, particularly in the US," without providing any details.

Chips are down

STMicroelectronics reported three-month sales of $1.40bn, versus $1.59bn in the second quarter and $2.04bn a year earlier, while gross profit was $462.1m.

President and Chief Executive Officer STMicroelectronics Pasquale Pistorio
STMicro's Pistorio expects fourth quarter revenues and gross profits to be flat
Analysts had been expecting a 14% fall.

Chief executive Pasquale Pistorio said STMicro had been hit by deteriorating market conditions in all its sectors, and said he now expected fourth-quarter revenues and gross profits to come in at the same level as the third quarter.

STMicro's share price, which was down over 8% before the announcement, recovered slightly to be 6.7% down.

See also:

10 Oct 01 | Business
Autonomy warns on profits
02 Oct 01 | Business
Microsoft slammed for software costs
03 Oct 01 | Business
Upbeat forecast lifts Misys
19 Jul 01 | Business
SAP's profits soar 78%
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