French IT services group Atos Origin (ATO.FR) Wednesday said third-quarter revenue fell, hit by the bankruptcy of a large client and the delay of some contract renewals in the U.K., but confirmed its full-year guidance.

Atos still expects organic revenue to decline slightly this year, largely due to the bankruptcy of German retailer Arcandor. Organic revenue declines should be slower than in 2009, the group confirmed.

Atos Origin should return to organic revenue growth in 2011, Deputy Chief Executive Officer Gilles Grapinet said during a conference call.

Having been hit hard by the financial crisis and resulting economic downturn, Atos has seen its financial and manufacturing clients start to recover. "The signs of recovery are becoming increasingly stronger," Grapinet said.

The group, which competes with larger French rival Capgemini (CAP.FR) and U.K.-based Logica PLC (LOG.LN), also confirmed it still expects to improve its earnings before interest and tax, or EBIT, margin by 50 to 100 basis points this year.

Revenue for the three months ended Sept. 30 totaled EUR1.21 billion, down from EUR1.23 billion in the same period last year. A poll of 13 analysts provided by the company had forecast revenue at EUR1.21 billion.

On a like-for-like basis, excluding currency fluctuations, disposals and acquisitions, revenue fell 3.5% in the third quarter.

Apart from the hit taken from Arcandor, some significant contract renewals in the U.K. were postponed into the fourth quarter due to negotiations with the U.K. government amid spending cuts, Atos said. The group on Sept. 10 signed a memorandum of understanding with the U.K. government, which will allow it to continue to deliver all its existing IT contracts with the government.

Atos shares Tuesday closed at EUR33.44.

-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54; ruth.bender@dowjones.com

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