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Germany's Software AG beat analysts' expectations for licence sales and earnings in the third quarter, thanks to strong mainframe software sales and careful cost management, it said on Friday.

Germany's second-biggest software maker after SAP said full-year licence sales and operating profit margins would be at the top of its forecast range, but stuck to its outlook for total sales this year and next.

Licence sales, an important indicator of future revenues, rose 16 percent from a year earlier to 29.2 million euros ($35.4 million), beating all estimates in a Reuters poll of 10 analysts, whose forecasts had averaged 27.9 million euros.

In the third quarter, earnings before interest and tax (EBIT) represented 22.3 percent of sales, up from 21.7 percent in the same period a year earlier.

"We believe that we have a very good chance of achieving an EBIT margin at the upper end of the target corridor of 20 to 22 percent that we set for the company at the end of last year," Chief Executive Karl Heinz Streibich said in the statement.

Total sales rose 7 percent to 103.7 million euros, also higher than the average poll estimate of 102.2 million.

Copyright Reuters, 2005


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