But finance director Eric Albrand then reassured in a telephone conference call that the operating margin in the second half would be an improvement on the first-half figure.

He acknowleded that the full-year margin would fall short of targets but played down the shortfall in the first half.

However the price of shares in Altran Technologies continued to fall, showing a loss of 16.94 percent to 7.50 euros.

The market had reacted mainly to signals that the company was unable to maintain a rhythmn of six-monthly improvements in its operating performance.

Altran Technologies said that sales in the second quarter had risen by 1.6 percent on a 12-month basis to 374.3 million euros (477.2 million dollars).

The increase was attributable to international activities which had grown by 10.4 percent, it said, and had been achieved despite an unfavourable effect of the way the days of official holidays had fallen this year.

A fall of activity in France, combined with unexpectedly high pay inflation would not enable it to increase its recurrent operating margin in the first half of 2006 compared with the figure for the last six months of 2005.

For the whole of the first half, sales rose by 3.0 percent to 745.9 million euros.

For the first half, the current operating margin would be higher than the margin in 2005 which had been 6.5 percent.

But the group said it did not now expect this figure to be an improvement on the figure for the last half of 2005 of 7.2 percent.

In April, the company had said that its current operating margin should increase half-year by half-year in 2006.

Albrand said that the company would not now achieve its target of an operating margin of 8.1 percent in 2006 as it had thought possible in April.

He said: "We are running behind what we had expected as an operating margin in the first half, mainly because of an increase in pay costs."

But the margin in the first half "will not be that far off the margin in the second half of 2005".

"We are not talking here of very big figures," he said.

A broker in Paris, who declined to be named, commented: "Altran has given a warning for its results and this is weighing on the shares."

The group has now signalled an operating margin of 6.5-7.2 percent which was below the figure broadly expected by analysts of 7.5-7.8 percent.

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