SAP shares drop on falling business

SAP, the world's largest enterprise software maker, said its business had dropped off abruptly, leading to a warning on its third-quarter revenue.

It now expects revenue from software and software-related services to rise only 13-14 per cent.

SAP said it expected third-quarter 2008 US GAAP software and software-related service revenues of between €1.970 billion (£1.530 billion) and 1.980 billion.

"The market developments of the past several weeks have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter," co-chief executive Henning Kagermann said in a statement.

"As SAP is still finalising the quarter-end closing process, total revenues and operating income are not yet available and will be provided along with further details on Oct. 28, including an update of its 2008 outlook," it said.

SAP shares fell 19 per cent by 1530 GMT to €27.945, the second-leading decliner among German clue chips. Shares in rival Oracle fell nearly nine per cent.

"The overall fundamentals of our business remain in place. SAP did report double-digit growth in software and software-related service revenues for the quarter and we expect to have gained further market share, even during unfavourable market conditions," Kagermann added.

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