* Posts better than expected Q3 results
* Confirms 2018 earnings guidance
* New CEO eyes acquisitions in data storage (Recasts on CEO strategy review and M&A)
FRANKFURT, Oct 19 (Reuters) - Software AG's new chief executive plans to launch a strategy review and look at possible acquisitions in data integration, he said on Friday after the company posted slightly better than expected quarterly results.
Sanjay Brahmawar has spent his first 60 days as CEO of Germany's second-largest business software company meeting staff and customers around the world. He said he would feed calls for more collaboration and a focus on the industrial internet into a review to be completed by February.
"Our business is reliable and works at scale," he told analysts on a conference call. "Clients want to see us improve visibility."
Brahmawar is an IBM veteran brought in by Software AG ahead of its 50th anniversary next year.
The company, which competes with IBM, TIBCO and Mulesoft, specialises in business databases and middleware. It has also carved out an 'Internet of Things' (IoT) division that helps industrial firms automate production and is achieving triple-digit growth.
Asked about possible acquisitions, Brahamawar said: "We have a strong financial position and good, strong cash flow. That allows us the ability to take action."
Software AG would examine whether to build, acquire or partner, he said, adding that there is potential for the company to expand into data integration applications.
Shares in the company rose by up to 6 percent in early Frankfurt trading after it beat market expectations for third-quarter revenue and profit.
The gains, which were pared to 1 percent by 0920 GMT, partly reflected relief that the Software AG did not produce any negative surprises, analysts said. Its shares remain 17.5 percent down this year, valuing the company at $3.2 billion.
Third-quarter revenues grew by 7 percent at constant currency to 208.8 million euros ($239.3 million), against mean expectations of 205 million euros in a Reuters poll of analysts.
Non-IFRS earnings before interest and amortisation were flat at 63.8 million euros and net income rose 4 percent to 44.7 million euros.
The new Cloud and IoT division reported revenue of 9.1 million euros, up 144 percent. The unit's annual recurring revenue - a key metric targeted by the company - rose 111 percent, it said.
The Darmstadt-based company reiterated its full-year guidance across the board, forecasting a non-IFRS EBITA margin of 30-32 percent. Non-IFRS earnings per share are forecast to rise by 5-15 percent. ($1 = 0.8724 euros) (Reporting by Douglas Busvine Editing by David Goodman)