Tieto raises yearly profit outlook after Q3 boost
HELSINKI (Reuters) - Nordic IT services provider Tieto (TIE1V.HE) reported better-than-expected profit for the third quarter, helped by cost cuts and sales growth, and firmed up its profit outlook for the year.
Tieto, which competes with bigger corporate technology services companies such as Accenture (ACN.N) and IBM (IBM.N), reported a climb of 8 percent in operating profit excluding one-offs to 37.1 million euros ($48.49 million), beating all analysts' forecasts in a Reuters poll.
Tieto said profit growth was boosted by a 7 million euro drop in subcontracting costs.
Sales grew 2 percent to 423.5 million euros, also beating all forecasts, which ranged from 393 million to 420 million.
Full-year operating profit, excluding special items, was expected to rise more than 10 percent from the previous year's 117 million euros. Previously the company had forecast unspecified growth.
A strategy revamp under new Chief Executive Kimmo Alkio has helped push Tieto shares up 23 percent so far this year, valuing the firm at 970 million euros.
Tieto aims to reach a 10 percent operating profit margin by 2016. So far this year its underlying operating profit margin stands at 6.9 percent. ($1 = 0.7651 euros)
(Reporting By Tarmo Virki; Editing by Muralikumar Anantharaman and David Cowell)
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