SAP denies panic following a fall in profits

German software giant SAP last week announced a 22 per cent year-on-year fall in profit for the first quarter of 2008.
Executives insisted that the shortfall was driven by accounting and not by any decline in its business operations.
SAP’s profit dropped to €242m (£191m) from €310m (£245m) in the first quarter of 2007, despite revenue rising to €1.6bn (£1.25bn), up from €1.4bn (£1.1bn) in the first quarter of 2007. SAP shares fell 6.5 per cent as a result of the news.
The company blamed a slide in the value of the US dollar against the euro, as well as an increase in charges related to its planned €4.8bn (£3.8bn) acquisition of business intelligence firm Business Objects.
SAP co-chief executive Henning Kagermann cited two “extraordinary effects”, and emphasised that the Business Objects acquisition was still on track to be completed in 2008.
“One is clearly currency, with the euro having strengthened significantly, causing a huge currency headwind for SAP and a negative quarterly impact of €46m (£36m),” he said.
“Second, the acquisition of Business Objects generated acquisition-related charges of €130m (£102m) within the quarter.”
SAP co-chief executive Léo Apotheker insisted that SAP had increased its software market share in the Americas, despite registering a 13 per cent year-on-year revenue decrease for the segment. Equivalent European sales were up 23 per cent.
“The US market is tough. On the positive side, we closed many more deals there than a year ago, more than 50 per cent with new customers,” he said.

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