Dassault Systemes cuts 2024 earnings view, citing delays to customer orders

Logo of Dassault Systemes SE is seen on a company building in Paris

(Reuters) -French software company Dassault Systemes cut its full-year earnings target on Tuesday, sending shares lower, as it warned that customers were being cautious with spending and were delaying the signing of contracts.

It now expects 2024 diluted earnings per share (EPS) growth in the range of 8% to 11% year-on-year, against previous guidance for 10% to 12%.

CEO Pascal Daloz cited "large transaction delays" weighing on the group's sales.

Dassault, one of France's leading IT groups, sells software for carmakers, plane makers and industrial companies among others.

"Importantly, 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."

The group' shares were down 4.7% as of 0733 GMT, heading for their biggest day drop since early February.

Investors were not necessarily expecting a guidance cut at this point in the year, JPMorgan analysts said in a note.

Questions will be raised as to why Dassault is flagging a complex environment now, since the geopolitical situation has been uncertain for a while, they added.

For the second quarter, Dassault reported preliminary total revenue of around 1.50 billion euros ($1.62 billion), missing its own guidance of between 1.53 billion and 1.56 billion euros.

($1 = 0.9236 euros)

(Reporting by Olivier Sorgho; Editing by Christian Schmollinger, Janane Venkatraman and Jan Harvey)