SAP profits and margins slide as recession bites


SAP profits and margins slide as recession bites

Antony Savvas

SAP has posted a slide in third quarter profits and margins, as the effects of the global economic downturn start to hit large software suppliers.

For the quarter ended 30 September, SAP saw its net profit slump 5% to £260m, and its operating margins fall almost 3%, when compared to the same quarter last year.

SAP still tried to put a positive spin on the disappointing results though.

Henning Kagermann, co-CEO at SAP, said, "The third quarter 2008 was SAP's 19th consecutive quarter of double-digit growth in software and software-related service revenues at constant currencies."

But SAP is not burying it head in the sand. Kagermann said, "Customers are continuing to spend on our products, but the economic and business environment is uncertain. Our business model is flexible, and we are focusing on protecting our operating margins and earnings."

He added, "We are assessing business activity continuously, and we are balancing the need for greater efficiencies with steady advancements in our products, customer services and technologies.

"We have been through uncertainty before, and have always emerged as a better, stronger and more efficient company."

Third quarter sales were up 14% to £1.85bn, but obviously weren't as profitable.

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