Germany's SAP , the world's biggest maker of business software, reported a jump in its third quarter sales and profits, sending its shares 2 percent higher on Friday.

SAP's pipeline remains very strong and companies continue to invest in IT, SAP said in a statement, alleviating some of the fears of a slowdown in technology spending.

In the third quarter SAP said sales at its key software and software-related services business rose 16 percent from a year ago to 2.69 billion euros, with group sales of 3.41 billion beating a 3.32 billion consensus from Thomson Reuters I/B/E/S.

Underlying operating profit for the group jumped 23 percent from a year ago to 1.13 billion euros ($1.5 billion), beating analysts' average forecast of 1 billion.

Reported profit numbers grew even faster due to a one-off gain of 723 million euros from the reduction of a litigation provision.

While we believed that SAP will show a sound quarter, we are positively surprised in particular by the strong licenses, DZ Bank analyst Oliver Finger said in a note. We think that the new products helped SAP to grow its top line.

Despite a strong third quarter SAP stuck to its outlook for the full year, citing the uncertain macroeconomic environment.

The company forecast in July it would reach the high end of its 10 to 14 percent growth forecast for software and related services in 2011, and said group operating profit would come in at the high end of the previously given range of between 4.45 billion euros and 4.65 billion.

SAP shares were 2 percent higher at 41.35 euros by 1032 GMT.

The company reports full results on Oct 26.

(Reporting by Tarmo Virki, Frankfurt Newsroom; Editing by Hans-Juergen Peters and Helen Massy-Beresford)

Germany Software