Action Insight | Written by ActionForex.com | Nov 14 07 13:59 GMT | Forex Mid-Day Technical Report Euro Firm, Sterling Pressured, Dollar Mixed Euro remains firm across the board after solid GDP data. On the other hand, Sterling is hammered on increased expectation of rate cut from BoE in early 08. Dollar remains mixed in general after weaker than expected PPI report which showed 0.1% mom, 6.1% yoy growth in Oct comparing to expectation of 0.3% mom, 6.3% yoy. Retail sales rose 0.2% in...

SAP () disappointed investors Wednesday by reporting first-quarter revenue and software license sales that missed analyst estimates.

It also said a key software project has been delayed.

SAP, based in Walldorf, Germany, said net income fell 22% from the year-earlier quarter to 242 million euros, or $374 million at early Wednesday’s currency exchange rate. Excluding the write-down from its nearly $7 billion acquisition of business intelligence software maker Business Objects, SAP said profit rose 7% from a year ago.

Europe’s largest software maker said revenue rose 14% to 2.46 billion euros, or $3.83 billion.

The consensus estimate of 18 analysts polled by Thomson Reuters called for revenue of 2.46 billion euros, or $3.96 billion.

SAP reported software license revenue of 622 million euros, or $968.5 million.

That’s below the consensus analyst estimate of 679 million euros, or $1.06 billion, according to JMP Securities.

Software licenses, a key gauge of future service revenue and growth, were weakest in the U.S., down 2% when using a constant currency exchange rate.

The company cited dollar weakness against the euro as a factor hurting its performance, since much of its business comes from the U.S.

The company’s top executive also said the U.S. market was slow in general.

“(In) North America, it’s not a secret the market is tougher,” SAP Chief Executive Henning Kagermann said Wednesday in a conference call with analysts. “Customers are more cautious, and the deal size is lower than in past quarters.”

SAP’s U.S. stock fell as much as 5.4% on Thursday before ending the day down 4.2% at 50.23.

Archrival Oracle’s () shares also fell 4.2%.

SAP sells products and services worldwide, so the U.S. downturn shouldn’t be a big problem unless it starts bleeding into foreign markets, said Michael Nemeroff of Wedbush Morgan Securities. He rates SAP a hold.

“We’re a bit disappointed with the quarter, even though we expected the U.S. was going to be weak for SAP,” he said. “We will be more concerned if we see this slowdown spread into Europe.”

SAP said BusinessByDesign its largest development project to date has been delayed “to validate and fine-tune the solution.”

Its launch had been planned for this summer.

BusinessByDesign is intended as a low-cost, on-demand software service for small and midsize firms.

As a result of the setback, SAP said it would cut its investment in the project by 100 million euros, or $156 million, this year in order to expand operating margins. The delay caused SAP to extend its goal for broad adoption of BusinessByDesign by 12 to 18 months.

SAP had hoped to attract 10,000 customers and $1 billion in revenue from the project by 2010. Now it’s shooting for 2011 or 2012.

The company will sign up far fewer clients for the new service this year than the 1,000 or so it had expected, said JMP analyst Patrick Walravens. “Our due diligence suggests the number of customers is around 60 and that problems with multiple data models are hurting the BusinessByDesign solution,” he wrote in a note to investors.

He rates SAP as market underperform, or sell.

BusinessByDesign could turn out to be a key source of growth for SAP, said James Gilman of Cross Research. He rates the stock a hold.

SAP’s BusinessByDesign delay seems to be in order to offer a more feature-rich product, Gilman says.

“On the positive side, we’ll see a margin expansion this year because they will spend less on development costs,” he said. “This is a new initiative with growing pains, but we expect SAP to succeed with BusinessByDesign over time. It will just take longer.”

BOSTON: Reebok International and its corporate parent, Adidas Group, an Olympic sponsor, are dropping plans for a hospitality facility to host athletes, guests and journalists at the Beijing Games because of logistical demands made by the Chinesegovernment. Reebok, which has a major marketing campaign built around Yao Ming, the Chinese basketball star and Reebok endorser, also said there was now only a slim chance that the brand would be able to host a public event with Yao in Beijing, as the...