Software AG Net Rises 29 Percent; Sees Full-Year at Upper End of Forecast

Software AG, Germany’s second- largest software maker, said second-quarter profit climbed 29 percent driven by sales growth at its business integration software unit Webmethods, which it bought in 2007.

Net income rose to 37.4 million euros ($48.7 million) from 28.9 million euros a year earlier, the Darmstadt, Germany-based company said in a statement today, beating the 34.8 million-euro average estimate of seven analysts surveyed by Bloomberg. The company raised its full-year outlook.

Software AG, which specializes in streamlining business processes and software consulting services after buying IDS Scheer AG last year, said sales advanced 52 percent to 267.3 million euros from 176.4 million euros. Analysts had estimated revenue at 263.8 million euros. Software AG’s customers include Coca-Cola Enterprises Inc., Apple Inc., and the European Central Bank.

“With Webmethods we have a new, profitable growth driver that will propel the company into a new dimension,” Chief Executive Officer Karl-Heinz Streibich said in the statement. “The integration of IDS Scheer AG will strengthen our growth trend and dynamic results even further in the future.”

Companies are resuming spending on applications after the global economic slump, benefitting Software AG and IDS Scheer. IDS Scheer customizes software bought from companies including SAP AG, the world’s largest maker of business management software. SAP said July 27 said sales of software and related services rose 16 percent in the second quarter.

Outlook

For the full year, Software AG now predicts that net income will rise between 10 percent and 12 percent from 140.8 million euros in 2009. Its previous forecast was for net income to grow 8 percent to 12 percent.

Total revenue is still expected to climb 25 percent to 30 percent from 847.4 million euros, and product revenue will advance between 12 percent and 15 percent from 580.5 million euros, both at constant currency rates, the company forecast.

Software AG shares fell 1.9 percent to 91.8 euros in Frankfurt trading yesterday, for a gain this year of 20 percent.

To contact the reporter on this story: Ragnhild Kjetland in Frankfurt at rkjetland@bloomberg.net

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