SAP's 1Q net slips to $376.82 million on buyout, weak dollar

BERLIN — Software maker SAP AG said Wednesday its profit slipped in the first quarter because of its takeover of a software company along with a weaker dollar, but its sales were higher and it raised its 2008 outlook.

The Walldorf-based company, whose programs help companies do back-office work such as payroll, inventory management and accounting, said its net profit in the January-March period fell 22 percent to 242 million euros ($376.82 million) from 310 million euros a year earlier, below the 296 million euros ($460.9 million) that analysts polled by Dow Jones Newswires had forecast.

Many of SAP's customers are in the United States and the dollar has slid in value against the euro by nearly 5 percent in the last three months.

SAP's total revenue rose 14 percent to 2.46 billion euros ($3.83 billion) from 2.1 billion euros a year ago, just above the 2.45 billion euros ($3.81 billion) that analysts had forecast.

SAP's software sales, a closely watched barometer because it results in future revenue from maintenance and consulting services, rose 11 percent to 622 million euros ($968.5 million) from 562 million euros.

"Our growth strategy, which comprises three pillars — the established business, the midmarket and the business user solutions — is working quite well," Chief Executive Henning Kagermann said in a statement, adding that SAP's presence globally has helped it move forward.

The company said that its efforts to bring its subscription-based software Business ByDesign to six countries — where it has early adopter customers — would start this year with more countries expected to follow in 2009.

"It is expected to take around 12 months to 18 months longer than the original 2010 target to reach the SAP Business ByDesign $1 billion (640 million euros) revenue and 10,000 customer potential," the company said in a statement. "However, the company will use SAP Business ByDesign innovations and technologies for the existing solutions and this will contribute significantly to the overall revenues of SAP in 2010."

Looking ahead, SAP said it expected 2008 software and software-related service revenue, excluding the contribution from software company Business Objects, to increase by between 12 percent and 14 percent. It will also buy back another 250 million euros ($389.3 million) worth of its shares.

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