By Juliette Portala
(Reuters) -Atos shares fell on Wednesday as market concerns over the extensive turnaround task ahead for new management, which is restructuring the French IT consulting group, cast a shadow over a beat in its first-quarter revenue.
"While the worst seems finally to be behind them, we maintain our 'neutral' rating until the turnaround is more transparent," analysts at J.P. Morgan wrote in a note.
Fuelled by an improvement in its tech foundations unit, Atos' consolidated revenue reached 2.75 billion euros ($2.92 billion), above analysts' average 2.68 billion euro expectation.
Citigroup flagged that bookings had come in at multi-year lows, however, which Atos attributed to a very low level of large contract renewals and other factors.
"We remain unconvinced for now," Citi analysts said.
Shares in Atos, which rose as much as 3.4% in early trading, reversed course to drop by more than 5%.
The stock lost half its market value last year and exited France's CAC 40 index after some accounting errors and a failed attempt to acquire a U.S. group precipitated a loss in investor confidence.
Rodolphe Belmer, who took over the reins from former Chief Executive Officer Elie Girard in January, vowed to start over with a clean slate as he seeks to reorganise the firm around three business units and streamline its governance.
The Paris-based group, which develops solutions in data management, business applications and cybersecurity, is set to restructure around three business units: tech foundations, digital, and big data and security (BDS).
Belmer said in a call that to enhance their operating performance, business lines working on such different dynamics should be structured and monitored separately.
Properly structuring the business into different divisions will help the markets "make up their mind" on the true valuation of the business as a whole, he added.
Formed partly by a string of acquisitions under former CEO Thierry Breton, Atos confirmed its full-year guidance and is set to hold its Capital Markets Day on June 14.
($1 = 0.9417 euros)
(Reporting by Juliette Portala; Editing by Subhranshu Sahu and Edmund Klamann)