Finland’s Tietoevry Q1 profit misses forecast, maintains 2021 outlook

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Finland’s Tietoevry Q1 profit misses forecast, maintains 2021 outlook

Nordic IT services provider Tietoevry on Thursday posted a smaller-than-expected gain in its first-quarter operating profit, hit by declining profits at its largest unit, while it maintained its full-year outlook.

The company, which finalized the acquisition of Norway’s Evry in December of 2019, said its operating profit rose to 56.7 million euros ($68.78 million) from 50 million a year ago, missing the mean estimate of 69.7 million euros according to Refinitiv data. Tieto repeated its forecast for 2021 sales to be roughly flat, while the margin for operating profit before amortization (EBITA) would improve to 13%-14% from 12.7% last year.

First-quarter revenue dropped 4.4% to 711.5 million euros, with Tietoevry’s cloud and infra unit declining 15% to 216.2 million euros. The unit, the largest for the company, saw its underlying operating profit fall to 8.6 million euros from 23.7 million in the year-ago quarter.

“Due to contracts lost prior to the merger and accelerated shift to cloud environments, the company has initiated measures to reduce production capacity and headcount, including personnel consultations affecting up to 300 roles,” it said. ($1 = 0.8244 euros)

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