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SAP Tops Estimates

The company also affirms its full-year guidance.

Updated from 9:01 a.m. EDT

SAN FRANCISCO -- German enterprise software company


(SAP) - Get Report

reported quarterly revenue that was slightly above Wall Street's expectations Thursday.

SAP reported a top line of $3.45 billion, up 9.5% over the same quarter of 2006 when revenue was $3.15 billion. Analysts were expecting $3.4 billion in revenue, according to Thomson Financial.

The company earned $582.1 million, or 48.5 cents a share, vs. $527.9 million and 43 cents a share in the year-ago period. Analysts were looking for a profit of 46 cents this year.

During the quarter, SAP added


(WMT) - Get Report

to its client roster. The retailer is installing SAP's enterprise resource planning system, SAP Americas CEO Bill McDermott said in an interview. It replaces JD Edwards software Wal-Mart had been using. JD Edwards is sold by SAP competitor


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SAP said sales of software and services grew 16% worldwide. Growth was 15% in the Americas and 30% in the Asia/Pacific region, McDermott said.

SAP scaled back the pace of its share repurchasing, spending $357 million for 6.2 million shares during the quarter, CFO Werner Brandt said on a conference call. The company bought back 20.4 million shares in the first 9 months.

Operating margin was 24.8%, flat year on year, despite a 120-basis point investment the company made in its on-demand software suite, Business ByDesign, which debuted in September, Brandt said.

The company reaffirmed its full-year guidance and said revenue should be at the high end of range. The consensus fourth-quarter revenue estimate is $4.58 billion.

However, the company was unlikely to sustain in the final quarter the very high growth rate it saw in the first nine months, CEO Henning Kagermann said on the call.

The company has added 3,100 employees year to date, bringing the total to, 42,700. SAP expects to add another 900 employees by the end of the year, primarily to sales/marketing and research teams as the company prepares to sell the on-demand product and integrate

Business Objects


, Brandt said. The company recently announced its intent to buy the French business intelligence software vendor.

Kagermann said the company is currently focused on the friendly buyout, but would not rule out other large acquisitions in the future.

The company has no interest in acquiring

BEA Systems

, McDermott said. Oracle disclosed a bid for BEA, a middleware vendor, on Oct. 12. "It would be completely redundant with what we're doing with NetWeaver," SAP's middleware platform.

"BEA is essential for Oracle. They have no organic growth," McDermott said.