Nordic IT services group TietoEnator says it may miss earnings forecasts for the year, as challenging conditions in banking and financial markets contributed to an unexpected dip in second quarter profit.
Shares in the Finland-based group plunged to their lowest in five years as the company reported net income of EUR4.8 million, down from EUR17 million in the year ago period, and way off analyst estimates for EUR18 million. Net sales increased by five per cent to EUR434 million.
The company reported EUR4.9 million of capital losses - mainly from the divestment of parts of the German banking & insurance business - and cited challenging delivery projects in the core banking area and higher product development costs. The firm reported EUR3 million in losses on a number of unspecified "large, challenging" core banking projects.
TietoEnator's Deputy CEO Åke Plyhm says it would now be "difficult" for the company to hit profit guidance of over EUR124 million difficult for 2007.
By mid-day, shares in the vendor had sunk EUR3.53, or 15%, to EUR20.24.