German software company SAP second quarter net profit rises 4 percent to euro423 million

SAP Q2 net profit rises 4 percent to euro423 million

FRANKFURT — German software company SAP AG said Wednesday its second quarter net profit rose 4 percent as better margin growth offset a drop in revenues.

The Walldorf-based company reported net profit for the April-June period of euro423 million ($600 million) compared with euro408 million in the second quarter of 2008.

The company said revenues for the period fell 10 percent to euro2.6 billion from euro2.9 billion a year earlier, as the global downturn affected demand.

The company did not provide an outlook for sales and profit for the year, though it revised its margin outlook upward and said it was able to work on developing new products.

“While the operating environment remains difficult, we are beginning to have improved visibility into the second half of the year,” Leo Apotheker, the chief executive of SAP, said in a statement.

“Our robust business model provides us the ability to continue to innovate, which we believe is the foundation for future growth. I am excited about the new products that we are delivering to our customers.”

SAP said software revenues fell 40 percent to euro543 million from euro898 million in the year-ago quarter. The company said the decrease is the result of the difficult operating environment worldwide due to the continued global economic downturn, and the tough comparison to the second quarter of 2008, which was prior to the economic crisis.

Software revenues for the first six months were 37 percent lower at euro962 million from euro1.5 billion in the first six months of 2008.

The company’s software-related service revenues for the quarter fell 5 percent to euro1.95 billion from euro2.06 billion in the year-ago quarter.

For the first six months of the year, the company’s software service revenues were 3 percent lower at euro3.7 billion. Net income for the first six months fell 4 percent to euro627 million.

Shares of SAP closed slightly lower Tuesday at euro31.20.

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