SAP profit dips by 16 per cent in Q1 2009

SAP cut 3,000 jobs in January to prepare for a difficult year

SAP has disappointed analyst expectations with its financial first-quarter results for 2009, posting a 16 per cent fall in profit compared to the same period last year.

Profit for the quarter fell to $204m (£138m), while revenue slipped by three per cent year on year to $2.39bn (£1.62bn).

Software revenues took more of a hit than services, according to the results, plunging 33 per cent year on year to $418m (£283m).

"While visibility for software revenues remains limited, we continue to take the necessary steps to protect our margin in this tough operating environment," said Léo Apotheker, SAP co-chief executive.

The company initiated cost containment measures in October last year. It cut 3,000 jobs from its global workforce in January to prepare for a tough 2009, following a two per cent drop in annual profit to $1.88bn (£1.27bn). The cost of the restructuring charges in the quarter reached $160m (£108m).

"Our ability to deliver good margin performance in this environment, especially when you consider the restructuring charges related to the reduction of positions, is due to the strength, flexibility and scalability of our business model," said Apotheker. "We will continue to maintain tight cost controls."