Buoyed by strong U.S. sales,

SAP

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posted solid third-quarter earnings results Thursday, growing software license revenue by a robust 17%.

But the German software giant issued a cautious sales outlook, and investors reacted by pushing ADR shares down $1.63, or 3%, to $50.16.

SAP said net income rose 16% to 388 million euros ($486 million), or 1.27 euros a share, with revenue up 11% to 2.2 billion euros.

Analysts had expected the company to report earnings of 381 million euros on revenue of 2.23 billion euros.

Sales of software licenses, which grew by a disappointing 8% in the second quarter, rebounded in the third, growing 17% to 691 million euros.

On a U.S. dollar basis that equals about $877 million, more than three times

Oracle's

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applications license revenue of $228 million in the company's most recent quarter, said Bill McDermott, CEO of SAP in the Americas. "Give Oracle credit for the deception that they are even in the same league with us," he said in an interview.

Oracle and SAP have been fighting to gain share in the market for enterprise applications, a market that SAP could once take for granted. But Oracle has spent some $20 billion in the last few years to acquire a string of applications companies, notably PeopleSoft and Siebel Systems, and is now a very credible rival.

For SAP, it was the 11th consecutive quarter of double-digit license growth globally, and the 16th consecutive quarter of similar growth in the Americas, McDermott said.

Pro forma earnings per share for the full year, SAP said, are expected to be slightly above the 5.80 euros to 6 euros a share previously forecast. But it said in a statement: "From today's perspective, it appears less likely that product or software revenue growth will reach the upper end of the aforementioned ranges."

McDermott downplayed the negative news, saying "the business climate looks strong, businesses are prepared to spend. One has to recognize that our guidance is very aggressive whether it comes in at growth of 15% or growth of 17%."