The Walldorf, Germany-based business software giant SAP AG Wednesday reported a 12 percent plunge in its fourth-quarter profit, largely because of the company’s curtailed software expenditure during the global economic downturn.

In a statement pertaining to its fourth-quarter results, the SAP said that its net income fell to 727 million euros during the quarter, from the earlier year same quarter net income figures of 830 million euros. The average net income estimates by analysts in a Bloomberg poll was 736 million euros.

The company’s total revenue for the October-December quarter fell 9 percent to 3.19 billion euros, with the software revenue witnessing a 15 percent drop to 1.12 billion euros. Moreover, software and software-associated service revenue, which is one of the key indicators of SAP’s future financial performance, tumbled 2.56 billion euros, marking a fall of 4 percent.

In its forecast for 2010, SAP expects its operating margin to be 30-31 percent, vis-à-vis last year’s 27.4 percent; and its software and software-related service revenue increase to be in the range of between 4-8 percent.

About the 2010 projections, the SAP CEO Leo Apotheker said: “Along with margin expansion for 2010, we are also ready to return to top-line growth, although the market continues to be challenging and uncertainty among customers still exists. For 2010, we will continue to maintain strict cost controls with a spotlight on further margin expansion.”