French IT firm Atos reports drop in revenue, to conduct U.S. accounting review

FILE PHOTO: FILE PHOTO: People walk in front of the Atos company's logo during a presentation of the new Bull sequana supercomputer in Paris
FILE PHOTO: People walk in front of Atos company's logo during a presentation of the new Bull sequana supercomputer in Paris, France, April 12, 2016. REUTERS/Philippe Wojazer/File Photo/File Photo

April 20, 2021

By Bartosz Dabrowski and Juliette Portala

(Reuters) -French IT consulting group Atos reported a drop in first-quarter revenue on Tuesday, putting further pressure on its share price which has been hit by an accounting issue in the United States.

The company, which develops solutions in hybrid cloud, big data, business applications and digital workplace, disclosed earlier this month that auditors had found accounting errors at two U.S. units, sending its shares diving 18% at the time.

On Tuesday the company said it had decided to conduct a full accounting review of the two U.S. units and would give a status update when it releases first-half results on July 28.

Atos also has a big contract to provide solutions for the Olympic Games in Tokyo and said that it was prepared for all scenarios, including a further postponement or complete cancellation of the event.

“For us, there will be no cancellation of the contract even if the Olympics were to be postponed,” head of investor relations Gilles Arditti said in a conference call.

Atos shares were down by more than 5% after the company said its revenue for January-March dropped 3.9% organically from a year earlier to 2.69 billion euros ($3.24 billion).

The company, however, maintained its full-year guidance.

“The results today are a meaningful miss (on market expectations) and likely to weigh further on sentiment,” Barclays said in a note, adding that the U.S. accounting situation was a bigger concern.

Year to date, Atos’ shares have now declined by nearly a quarter.

The company also said on Tuesday that it had acquired Canada-based Processia, UK-based Ipsotek and German firm cryptovision, as it continues with bolt-on acquisitions in a bid to boost revenue from digital, cloud, security and decarbonisation business over the medium term. It gave no financial details of the transactions.

($1 = 0.8292 euros)

(Reporting by Bartosz Dabrowski and Juliette Portala in Gdansk ; Editing by Tomasz Janowski and Susan Fenton)