UPDATE 4-Weak US sales hit SAP Q1; new software delayed

(Recasts; adds CEO comments, analyst; updates shares)

By Georgina Prodhan, European Technology Correspondent

FRANKFURT, April 30 (Reuters) - Business software maker SAP (SAPG.DE) posted disappointing first-quarter results as a weak U.S. economy started to bite, and delayed targets for new software on which its growth plans depend, hitting its shares.

SAP reached the lower end of its full-year target range for growth in software and software-related services sales and kept its sales forecast on Wednesday as it begins to integrate Business Objects, its biggest-ever acquisition.

But the 15 percent rise in software and software-related service sales, SAP's key metric, was less than the market had expected. At constant currencies, SAP said the increase would have been 24 percent.

SAP said the U.S. market had been hard, echoing last month's comments from rival Oracle (ORCL.O).

"The U.S. market in the first quarter was tougher than expected," Chief Executive Henning Kagermann told a conference call for journalists. "We continue to watch the U.S. market closely."

SAP's results continued a dismal trend in this quarter's software earnings, a change from recent quarters when vendors of corporate software had appeared shielded from the effects of a U.S. economic slowdown.

Oracle posted weaker-than-expected software sales last month and some smaller software makers such as Software AG (SOWG.DE), Lawson (LWSN.O) and Epicor (EPIC.O) also disappointed.

"SOFTER THAN EXPECTED"

Shares in SAP -- whose software helps large firms to automate, integrate and manage their businesses -- fell more than 6 percent and by 0935 GMT were down 4.4 percent at 31.59 euros, the biggest losers in a flat DJ Stoxx 50 .

The stock is down 7 percent since the start of the year, underperforming Europe's technology index .SX8P by 11 percent, but at 18 times 2008 earnings, according to Reuters Estimates, analysts say it is still expensive compared with the sector.

"Amid little-inspiring results and in-line guidance, plus a fairly weak Business Objects contribution, we believe the risk factors still outweigh the opportunities," Cheuvreux analyst Bernd Laux wrote in a research note.

UniCredit analyst Knut Woller wrote: "Based on the softer-than-expected start into the year... we see the risk that the full year growth targets could be missed."

SAP raised its non-GAAP operating margin target for the year by one percentage point to 28.5 to 29 percent at constant currencies, compared with last year's 27.3 percent, as it halved planned investment in its new Business ByDesign software.