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Shares in SAP dropped by nearly 9 per cent on Friday after the German business software company warned it would miss its full-year software revenue target because of weak sales in the US and a falling dollar.

The warning - SAP’s second in less than a year - raised doubts about the company’s growth prospects this year and sent its shares falling sharply.

In a surprise announcement late on Thursday, the company said full-year software sales rose 13.5 per cent at constant currency rates, missing its own 15-17 per cent target.

It had previously said sales would come in at the low end of its forecast. Slowing growth in the US was the main reason behind the sales miss, and was of particular concern to investors, as the US has been SAP’s strongest growth market in recent quarters.

SAP said software sales in the US rose just 4 per cent in the fourth quarter. The weaker dollar against the euro contributed to the decline. At constant currency rates, software revenues in the Americas rose 10 per cent in the quarter, down from 24 per cent in the first nine months of the year.

“This will again raise fears that the company is facing a slowdown in its business,” said analysts at Dresdner Kleinwort in a note to clients. However, the analysts said the slowdown could be a short-term development, reflecting “the unpredictable nature of large deal timing.”

“Our conversations with SAP’s partners and customers point to a robust demand environment and we see scant evidence to suggest any inflexion point in spending,” Dresdner Kleinwort said.

Last month, Oracle, SAP’s US rival, reported disappointing software licence sales, which it blamed on a number of recent deals that had not been closed in the quarter and not a decline in demand or loss of business to rivals.

The weak sales development had yet to impact SAP’s profitability last year. The company said full-year earnings per share would reach €1.59, above its own forecast for an EPS of €1.45-€1.5. The increase was partly due to one-time tax gains in the second and fourth quarter of the year.

Shares in SAP were 8.7 per cent lower at €38.58 in afternoon trade after reaching a low of €38.27.

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