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UPDATE 1-France's Atos disappoints with 2018 outlook

Published 2018-02-21, 05:20 a/m
© Reuters.  UPDATE 1-France's Atos disappoints with 2018 outlook
ATOS
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Feb 21 (Reuters) - Atos ATOS.PA met expectations with 2.3 percent organic growth in annual revenue on Wednesday but its forecast for modest profit growth disappointed analysts, sending shares in the French technology consultancy lower.

It set a 2018 operating margin target of 10.5-11 percent of revenue, up from 10.2 percent in 2017.

It will see a benefit of around 50 basis points from the IFRS15 accounting standard which comes into effect this year, Morgan Stanley (NYSE:MS) analysts noted.

" The street is at the top of the margin guide pre IFRS changes," Morgan Stanley analyst Adam Wood said in a note.

Analysts at Invest Securities called the 2018 outlook "flavourless".

Atos shares were down 3.5 percent at 117.5 euros at 1018 GMT.

It reported full-year revenue of 12.69 billion euros ($15.64 billion) driven by its digital transformation businesses. That was in line with Atos' forecast of organic growth of more than 2 percent.

For 2018, it forecast organic revenue growth of 2 to 3 percent and free cash flow of around 60 percent of operating margin.

($1 = 0.8114 euros)

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