SAP beat market forecasts for quarterly license sales and operating profit but the recovery from a weak second quarter was not robust enough for the software firm to leave its full-year outlook untouched.
SAP shares fell by 2.8 percent in early trading Thursday to 159.80 euros, putting them among the biggest decliners in Germany's blue-chip DAX index.
The world's biggest producer of business software, which is facing increasingly aggressive competition from U.S.-based Oracle, stuck to its forecast on Thursday that 2006 license sales should rise 15 to 17 percent.
But SAP said in a statement: "From today's perspective, it appears less likely that product or software revenue growth will reach the upper end of the aforementioned ranges."
SAP's sales of new software licences rose 17 percent to 691 million euros ($866 million) in the third quarter, compared with an average of 672 million euros projected by 22 analysts in a Reuters poll.
The company said it increased licence sales in all regions, including a 19 percent rise in the important Americas market--the world's biggest for software--and a 3-percent rise in its German home market.
Emerging from a weak quarter
SAP said it had also increased its share of the global $16.4-billion market for core enterprise applications--which help companies automate processes such as supply chains and payroll--by 0.9 percentage points to 22.6 percent.
In the second quarter, the German software maker had disappointed investors with a rise of just 8 percent in licence sales--in contrast to Oracle, which surprised markets with stronger results.
SAP Chief Executive Henning Kagermann told CNBC television on Thursday he expected "business as usual" in the fourth quarter--traditionally the year's strongest.
But JP Morgan said: "Given that the license guidance range implies a sequential growth of 94 to 102 percent for 4Q licenses (SAP delivered 104 percent in 2004 and 101 percent in 2005), we believe SAP is seeing deterioration in its business."
"Oracle is becoming more price aggressive, forcing SAP to match. We understand from several key partners that SAP's closure rate has dropped in the U.S.," the bank's analysts wrote in a note.
SAP's third-quarter pro forma operating profit, excluding charges relating to acquisitions and stock options, also beat expectations, rising 17 percent to 606 million euros compared with the poll average of 599 million.
But again, the company said it was now less likely to reach the upper end of its full-year guidance for an increase of 0.5 to 1.0 percentage points in its pro forma operating margin.
SAP did, however, say it was likely to exceed slightly its full-year earnings-per-share target of 5.80 to 6.00 euros.
Total third-quarter sales of 2.25 billion euros and net profit of 388 million were broadly in line with expectations.