SAP profit up 10 percent in second quarter

July 18, 2013 by David Mchugh

(AP)—Business software maker SAP AG said net profit grew 10 percent in the second quarter to 724 million euros ($948 million) despite the economic slowdown in Asia.

SAP said Thursday that cost discipline helped it overcome a 7 percent slide in sales in its Asia-Pacific-Japan region. It said slowing growth in China was deterring businesses across the region - particularly in Australia and Japan - from investing in new and computing services.

China's economic growth cooled to an annual 7.5 percent in the quarter from 7.7 percent in the first quarter, the weakest figure since 1991.

Co-CEO Jim Hagemann Snabe called it "a good quarter in spite of a challenging market environment."

The company, based in Walldorf, Germany, saw strong growth in the company's off-site cloud computing business. Subscriptions and support revenue there more than tripled to 159 million euros from 52 million euros in the same quarter a year ago.

Most of SAP's revenue still comes from selling and maintaining software that runs on companies' own computers. But it says the world is turning to cloud computing - in which software runs on SAP servers and companies pay subscription fees to use it via the Internet - and says it is leading that transition.

Traditional software sales fell 7 percent. Total revenue across all business lines grew 4 percent to 4.062 billion euros. The company said that maintaining cost discipline in areas such as hiring helped it increase its profit margins slightly.

The Asia slowdown meant the company stayed with its forecast but lowered its outlook for the year to 10 percent growth instead of 11 to 13 percent.

The company's of 61 euro cents a share fell just short of analyst estimates compiled by FactSet of 62 euro cents per share.

Explore further: SAP says profits up in first quarter

Related Stories

SAP says profits up in first quarter

April 13, 2012

German software giant SAP said on Friday it was sticking to its full-year targets for 2012 after profits rose in the first three months.

SAP says profits up in first quarter

April 25, 2012

German software giant SAP said Wednesday it was sticking to its full-year targets for 2012 after net profit rose 10 percent in the first three months.

SAP says earnings up 18% in second quarter

July 24, 2012

German software giant SAP said Tuesday that bottom-line profits grew sharply in the second quarter of this year as software sales topped record levels.

SAP reports sales records in 2012

January 15, 2013

German software giant SAP said on Tuesday it achieved record sales last year, beating its full-year forecasts, even though acquisition costs hit earnings.

Recommended for you

US ends bulk collection of phone data

November 30, 2015

The US government has halted its controversial program to collect vast troves of information from Americans' phone calls, a move prompted by the revelations of former intelligence analyst Edward Snowden.


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.