Atos shares fall as turnaround struggle overshadows revenue beat



* Moves Russian services to other countries like India, Turkey

* Q1 book-to-bill ratio of 72%, down from 96% in Q1 last year

* Exceeds recruitment target with 8,234 new gross hires in Q1

* Sees H1 affected by continued decline in classic IT services

By Juliette Portala

April 27 (Reuters) - Atos ATOS.PA shares fell on Wednesday as market concerns over the extensive turnaround task ahead for new management, which is restructuring the French IT consulting group, cast a shadow over a beat in its first-quarter revenue.

"While the worst seems finally to be behind them, we maintain our 'neutral' rating until the turnaround is more transparent," analysts at J.P. Morgan wrote in a note.

Fuelled by an improvement in its tech foundations unit, Atos' consolidated revenue reached 2.75 billion euros ($2.92 billion), above analysts' average 2.68 billion euro expectation.

Citigroup flagged that bookings had come in at multi-year lows, however, which Atos attributed to a very low level of large contract renewals and other factors.

"We remain unconvinced for now," Citi analysts said.

Shares in Atos, which rose as much as 3.4% in early trading, reversed course to drop by more than 5%.

The stock lost half its market value last year and exited France's CAC 40 .FCHI index after some accounting errors and a failed attempt to acquire a U.S. group precipitated a loss in investor confidence.

Rodolphe Belmer, who took over the reins from former Chief Executive Officer Elie Girard in January, vowed to start over with a clean slate as he seeks to reorganise the firm around three business units and streamline its governance.

The Paris-based group, which develops solutions in data management, business applications and cybersecurity, is set to restructure around three business units: tech foundations, digital, and big data and security (BDS).

Belmer said in a call that to enhance their operating performance, business lines working on such different dynamics should be structured and monitored separately.

Properly structuring the business into different divisions will help the markets "make up their mind" on the true valuation of the business as a whole, he added.

Formed partly by a string of acquisitions under former CEO Thierry Breton, Atos confirmed its full-year guidance and is set to hold its Capital Markets Day on June 14. ($1 = 0.9417 euros)
Reporting by Juliette Portala; Editing by Subhranshu Sahu and Edmund Klamann

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.