SAP SE, Europe’s largest software company, forecast higher-than-expected operating profit this year after announcing job cuts and plans to refocus the company on its faster-growing cloud business.
Operating profit this year will be between 8.6 billion and 8.9 billion euros, the Walldorf, Germany-based technology company said in a statement on Friday. That beat analysts’ estimate of 8.49 billion euros, according to the average of a Bloomberg survey.
Revenue rose to 7.44 billion euros in the first quarter. That compared with an average estimate of 7.36 billion euros in a Bloomberg survey of analysts.
Sales at SAP’s largest cloud business rose to 3.18 billion euros during the period, beating analysts’ average estimate of 3.22 billion euros. Chief Executive Christian Klein is refocusing the 50-year-old enterprise software company around technology, selling assets and layoffs irrelevant to the fast-growing business.
“Our cloud computing momentum continued at a rapid pace, which contributed to our strong revenue,” Klein said in the statement.
In January, SAP said it would cut about 3,000 jobs this year and announced plans to sell its remaining stake in Qualtrics International Inc. SAP said at the time that the restructuring would cost the company 250 million to 300 million euros, most of it in the first quarter.
SAP said Friday that it will buy its stake in Qualtrics for about $7.7 billion.
A group of investors including Silver Lake and the Canada Pension Plan Investment Board agreed last month to buy Qualtrics in a deal that valued the entire business at $12.5 billion. While the sale has not yet been completed, SAP has stopped including the business’s contribution in its results.
SAP shares fell 0.4 percent to 115.60 euros in Frankfurt trading on Thursday. The stock is up 20% this year.