Feb. 13 (Bloomberg) -- Software AG, a German database maker, said fourth-quarter profit dropped after it took a charge to reorganize its business. The company said it expects operating profit to rise about 20 percent this year.

Net income fell to 100,000 euros ($128,000) from 16.1 million euros a year earlier, the company said on its Web site. Sales fell to 117.9 million euros from 120.3 million, the company said. Software was expected to report a loss of 2.4 million euros, according to a Bloomberg News survey.

Software, which competes with database makers including Oracle Corp. and International Business Machines Corp., announced in December it will reorganize to focus on improving existing client mainframes and developing more products to integrate business processes. The Darmstadt-based company had a 17 million- euro charge in the fourth quarter for the reorganization.

``The executive board views that concentrating on two business lines will lay the basis for sustainable growth in the following years,'' Software said in a statement. It predicted revenue would stabilize on higher sales of software licenses in 2004, after falling 11 percent last year.

Earnings per share this year excluding goodwill will be between 1.50 euros and 1.65 euros, Software said.

The company had a full-year loss of 3.4 million euros for 2003 on costs to reduce staff. Software is negotiating with labor representatives to cut an additional 164 jobs in Germany, it said yesterday.

To contact the reporter on this story: David Scheer in Frankfurt at dscheer@bloomberg.net.

Last Updated: February 13, 2004 02:33 EST