By Mauro Orru
Atos, the French IT company, saw its shares continue to drop on Monday following its second-quarter revenue and first-half free cash flow falling short of analysts' expectations.
At 1000 GMT, Atos shares were trading 16% lower at EUR9.46. On Friday, shares had already seen a decline of approximately 20% during intraday trading.
According to Stifel analysts, the company's second-quarter revenue witnessed a 1.8% organic growth year-on-year, reaching 2.74 billion euros ($3.02 billion). However, this figure fell short of the consensus estimate of EUR2.79 billion.
In terms of first-half performance, Atos experienced negative free cash flow amounting to EUR969 million, significantly worse than the consensus estimate of minus EUR680 million, as highlighted by the analysts.
When explaining the reasons behind the negative free cash flow, Atos's leadership team members - Nourdine Bihmane, Diane Galbe, and Philippe Oliva - cited the extensive focus on major transformative actions that are set to be implemented until 2023. These actions include margin expansion through restructuring efforts, addressing underperforming contracts, internal carve-out initiatives, and working capital normalization.
Atos faced setbacks in recent years, including failed takeover attempts and a series of profit warnings, resulting in the departure of two chief executives in 2021 and 2022. These challenges have affected investor confidence in the company.