Credit Crunch Has SAP in Sticky Situation

SAN FRANCISCO -- Chalk up another tech giant enduring the effects of the liquidity pinch.

SAP(SAP) said its third-quarter profit fell as the economic malaise suppressed software sales to midsized companies.

American depositary shares of SAP were down 42 cents, or 1.4%, to $29.80 in recent Tuesday trading.

Net income at the German business software company fell 5% to $584.5 million (388 million euros, at the average prevailing exchange rate for the quarter), or 53 cents a share, from $614.7 million, or 53 cents a share, in the year-ago period.

Excluding one-time charges, operating income grew 23% year over year to $1.1 billion (731 million euros), Bill McDermott, CEO of Global Field Operations, said in an interview.

The company earned 62 cents a share, before items. On that basis, analysts were expecting EPS of 57 cents a share, according to Thomson Reuters.

"SAP continues to be the market leader and one of the bellwether companies," McDermott said. "It can give you a feel for what's going on in the economy."

Broad economic turmoil made deal closures more challenging. During the final weeks of September, "we were in the midst of a global liquidity crisis not specific to SAP," McDermott said. Small and midsized companies had a difficult time getting capital during the last two weeks, when SAP typically closes on a large volume of business.

The third quarter's results were driven by sales to large businesses, CFO Werner Brandt said on the conference call.