Tieto Enato misses profit target

Swedish-Finnish IT services giant Tieto Enator has flagged that profits for the first quarter will be lower than expected. The news sent the company’s share price tumbling: by 9.20 am on Thursday the share price on the Stockholm Stock Exchange was down 7 percent to 263 kronor.

Operating profits during the period were €30 million, representing operating margins of around 7 percent. The company had predicted margins of 8-11 percent. Turnover grew by 8 percent. Three percent was from organic growth, while five percent was due to takeovers of other companies. Organic growth was lower than expected.

The company’s preliminary figure for total turnover was €440 million.

“The lower growth and profitability are mainly due to certain projects that have developed more weakly than expected and to higher restructuring costs than expected,” the company wrote in a statement.

The company will publish its quarterly report on 27th April.

TT/The Local