German software maker SAP sees 1st quarter net profit nearly double to $514 million

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SAP Q1 net profit jumps 97 pct to $514 million

BERLIN — German software maker SAP AG said Wednesday that its first quarter net profit nearly doubled as demand for its products rose in both developed and emerging economies, boosting sales.

SAP, whose programs help companies do back-office work such as payroll, inventory management and accounting, and is used by Apple Inc.’s iTunes, reported net income of €387 million ($514.3 million) in the January-March period compared with €196 million a year earlier. That’s an increase of 97 percent.

Despite the improved figures, shares of SAP were 1.7 percent lower to €36.21 in Frankfurt trading, part of a wider decline among the DAX which was down more than half a percent.

Germany’s biggest software company said the increase in profit was driven by a boost in revenue, which rose 5 percent to €2.5 billion in the quarter compared with nearly €2.4 billion a year earlier.

Of that figure, software revenues were up 12 percent to €1.95 billion and software license sales — a key barometer of maintenance and upgrade fees, rose 11 percent to €464 million compared with €418 million a year earlier.

“We are excited by our strong momentum and our return to growth in the first quarter,” chief financial officer Werner Brandt said. “A solid top-line performance in combination with an increasing operating margin puts us on track to achieve our financial objective of profitable growth over the long term.”

Bill McDermott, one of SAP’s co-chief executives, said the growth in the first quarter was the result of better business in “both our large, well established markets and our fast growing emerging markets.”

He cited an increased demand for the company’s SAP BusinessObjects products, along with more demand from small and mid-sized customers.

Jim Hagemann Snabe, the company’s CEO, said the growth in revenue was continued signs of improvement in the global economy with companies looking to spend again on information technology and back-end software management.

“As the environment improves and customers begin to invest for growth again, SAP is extremely well-positioned” to meet those demands, he said.

McDermott and Snabe were tapped as co-CEOs earlier this year when Leo Apotheker resigned after his contract was not renewed.

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