Strong 2006 Outlook for SAP

On Wednesday, German software maker SAP said it had a more optimistic outlook than was expected for the coming year in both profitability and licensing, shooting its shares up by more than 9 percent, Reuters reports.

Analysts originally predicted an increase in SAP’s licensing sales of 13 percent, however, the company said it would increase licensing by up to 4 percent more than was predicted, for an increase of 15 to 17 percent.

SAP also said it would increase its pro-forma operating margin, a key profitability metric which excludes acquisition and stock option costs, by as much as a percentage point, nearing its 30 percent mid-year target.

“The outlook is impressive,” said Theo Kitz of Merck Finck bank.

-Al Sacco