SAP Q1 profits tanks

SAP Q1 profits tanks
Photo: DPA
German professional software giant SAP posted a 16-percent drop in first quarter profit on Wednesday, where analysts had expected a slight increase.

The net profit of €204 million ($270 million) was well below an average forecast of €261 million compiled by Dow Jones Newswires.

SAP sales slipped by three percent to €2.397 billion, a statement said, while analysts had penciled in an increase of 3.7 percent. Software revenues, the group’s benchmark, recorded a steep drop of 33 percent to €418 million.

“While visibility for software revenues remains limited, we continue to take the necessary steps to protect our margin in this tough operating environment,” Léo Apotheker, co-CEO of SAP, said in a statement.

“We expect to exit this recession even stronger, just like we did after the downturn earlier in the decade.”

SAP said a recently-announced restructuring programme had taken €160 million from its bottom line and would end up costing a total of €200 to 300 million. The group’s first such programme since its creation in 1972 is expected to result in the loss of 3,300 jobs.

For the full year, SAP said it hoped that software revenues would fall by less than one percent, excluding exceptional items.

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