Dassault Systemes Shares Slump After Deal Delays Prompt Guidance Cut
By Mauro Orru
Shares of Dassault Systemes fell Tuesday after the French software maker said customers were shying away from signing large deals, a development that forced the group to cut revenue and earnings guidance for the year.
Chief Executive Pascal Daloz said some customers were delaying the signing of big deals in what he called a complex geopolitical environment. Cautiousness to ink contracts weighed on the group's top line in the second quarter and executives downgraded guidance for the year as they expect that behavior to continue.
"All deals that have been delayed are still in our roadmap for future quarters," Daloz said. "However, we anticipate that a certain volatility in customers' decision-making will continue and consequently believe it is prudent to reflect this in our full year outlook."
At 1015 GMT, Dassault Systemes shares traded 4.2% lower at EUR34.05. The stock is down 23% since the year began.
The group said its non-IFRS revenue in the second quarter came in at roughly EUR1.50 billion ($1.62 billion), below company guidance of about EUR1.53 billion to EUR1.56 billion.
Dassault Systemes, like other European software companies, presents its figures as two sets of numbers. One set is based on the International Financial Reporting Standards--an international accounting method that seeks to provide a global reporting standard--though analysts and investors tend to follow non-IFRS numbers. Non-IFRS figures exclude share-based compensation, restructuring expenses and acquisition-related charges.
For the year, the company now expects non-IFRS total revenue growth at constant currencies of 6% to 8%, compared with 8% to 10% previously, and non-IFRS diluted earnings per share growth of 8% to 11%, compared with 10% to 12% previously.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
July 09, 2024 06:42 ET (10:42 GMT)
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