Oct. 18 (Bloomberg) -- SAP AG, the world's largest maker of business-management software, said third-quarter profit increased 10 percent, less than half the pace of Oracle Corp., as revenue in the Americas trailed analysts' estimates.

Net income rose to 408 million euros ($581 million), or 34 cents a share, from 370 million euros, or 30 cents, a year earlier, Walldorf, Germany-based SAP said in a statement. License sales, a gauge of future maintenance revenue, climbed 11 percent to 715 million euros, slowing from a 17 percent gain a year ago.

Chief Executive Officer Henning Kagermann unveiled the $6.8 billion takeover of France's Business Objects SA last week, the biggest purchase in SAP's 35-year history, to accelerate growth and take market share from Oracle. SAP, which said today it won Wal-Mart Stores Inc. as a customer in the quarter, fell in Frankfurt trading after failing to increase a sales forecast.

``Many had expected an upgrade in its forecast,'' said Christoph Berger, who helps oversee $64 billion at Cominvest Asset Management in Frankfurt. ``The management decided to be a bit more conservative. That explains the decline in the shares.''

SAP said today it will reach the upper end of a sales forecast range given in January, when the company predicted software and related services revenue, excluding currency fluctuations, would rise 12 percent to 14 percent in 2007.

American Slowdown

SAP shares fell 1.31 euros, or 3.3 percent, to 38.29 euros in Frankfurt. They have lost 4.9 percent this year.

SAP had been expected to report profit of 415 million euros, the median estimate of 10 analysts compiled by Bloomberg. License sales were seen at 725 million euros, according to a separate survey of nine analysts via phone and e-mail. A third of the analysts surveyed had expected SAP to increase its forecast.

Redwood City, California-based Oracle, the third-largest software company, posted a 25 percent increase in profit in its first quarter, which ended in August, helped by a 35 percent jump in new software license sales.

Last week, Oracle, made a $6.7 billion hostile bid for BEA Systems Inc., which makes software that connects computer servers. BEA Systems rejected the offer as too low.

Software license sales in the Americas rose 3 percent, partly because of the rising euro, SAP said. That's the slowest growth since the fourth quarter of 2006. License revenue in Europe and Asia beat analyst estimates.

Sticking to Forecasts

``The Americas region was extremely disappointing,'' said Jochen Klusmann, an analyst at BHF-Bank AG in Frankfurt. Adjusted for some canceled contracts in the previous period and currency swings, Americas sales fell 8 percent, the worst performance in more than five years, he said.

As well as announcing the win with U.S. retailer Wal-Mart, SAP said Apple Inc., a client since 1995, signed a global enterprise agreement.

The German company generates most of its revenue from the biggest of its 41,000 customers, such as DuPont Co. and Nestle SA. The market for business software applications such as billing and inventory management may grow 11 percent annually in the five years through 2011, slowing from 14 percent in 2006, according to Boston-based AMR Research Inc. estimates.

``We'll have another year of strong environment,'' Kagermann said in an interview. ``We see no slowdown in demand from our clients. We expect similar strong organic growth as we see this year.''

Smaller Customers

To extend its customer base, SAP introduced a line of Web- based software dubbed Business ByDesign last month, targeting clients with as few as 100 employees. SAP aims to get $1 billion in annual sales from such customers starting in 2010 and will spend 400 million euros over two years to promote the product.

SAP repeated today that its operating profit margin will shrink as much as 1.3 percentage points this year to a range of 26 percent to 27 percent because of increased spending on software developed for smaller companies.

Third-quarter total sales advanced 9.4 percent to 2.4 billion euros, in line with analysts' median estimate.

``These results should reassure investors as to the outlook for SAP's core business and indeed the global appetite for IT,'' Dresdner Kleinwort analysts led by Matthew Palmer wrote in a note. Palmer has a ``buy'' rating on the shares.

SAP said its global market share for business software applications reached 27 percent in the four quarters through September, 3.5 percentage points higher than a year earlier.

Dollar Decline `Brutal'

As it sold more subscription-based software to smaller companies, SAP has given up forecasting license sales, instead giving a prediction of software revenue including services. That measure rose 13 percent to 1.74 billion euros in the third quarter, meeting analysts' median estimate.

The dollar fell 4.8 percent against the euro in the third quarter, reducing the value of U.S. revenue. The U.S. is SAP's largest market, accounting for 28 percent of nine-month sales. The dollar reached an all-time low of $1.4305 against the euro today. SAP had assumed an exchange rate of $1.32 for 2007.

``I can't say what I expect now,'' SAP Americas CEO Bill McDermott said in an interview. ``I only hope it doesn't get any worse. It's already pretty brutal.'' Sales growth in Americas will probably reach 8 percent in the current quarter, he said.

SAP was founded in 1972 by five former International Business Machines Corp. employees, and three of the founders remain the biggest shareholders.

To contact the reporter on this story: Kenneth Wong in Berlin at kwong11@bloomberg.net.

Last Updated: October 18, 2007 12:04 EDT