Tuesday, CGI Group Inc. (GIB, GIB.A.TO), a Canadian IT and business process services company, reported a 21% rise in its third-quarter net earnings, helped by a 6.5% revenue growth on a constant currency basis. On a continuing operations basis, the company's earnings were up 27.7%.
Third-quarter net income was C$77.9 million, or C$0.24 per share, compared with C$64.43 million, or C$0.19 per share, a year ago.
On July 21, the company had announced the divestiture of a Canadian business process unit providing claims adjustment and risk management services to the Canadian property and casualty, or P&C, insurance industry. The company has reclassified this unit as discontinued operations and expects the transaction to close in early August 2008. The third-quarter results included a net impairment of $3 million related to the transaction.
On a continuing operations basis, net earnings rose 27.7% to C$81.68 million from $63.97 million in the prior-year quarter. Earnings per share from continuing operations were C$0.25, in comparison with C$0.19 last year.
Third-quarter net earnings from continuing operations included $10.8 million, which was previously provisioned for income taxes and is no longer required. Excluding this, earnings per share from continuing operations were C$0.22 for the quarter.
CGI Group also posted quarterly revenues of C$950.47 million, up from C$914.02 million in the comparable period a year ago. On a constant currency basis, the revenue growth was 6.5%. Foreign exchange fluctuations negatively impacted the revenue by 2.5% or $23.3 million.
During the quarter, the company booked $1.01 billion in new contract wins, extensions and renewals, resulting in a book-to-bill of 104%. Backlog at the end of the third quarter stood at $12.03 billion or 3.1 times annual revenue.
For the nine months ended June 30, 2008, the company earned C$219.27 million, or C$0.67 per share, compared with C$170.83 million, or C$0.51 per share, in the previous year. Revenue rose to C$2.78 billion from C$2.73 billion in the prior-year period.
Among others in the sector, consulting and outsourcing company Accenture Ltd. (ACN), on June 26, has reported higher earnings for the third quarter, helped by revenue growth and higher operating margin.
On July 28, Electronic Data Systems Corp. (EDS) reported a 16% rise in its second-quarter profit, driven by a 3.1% increase in top line and cost control.
GIB closed Monday's trading at US$10.22 on the NYSE, down C$0.11, on a volume of 147,900 shares. On the Toronto stock exchange, GIB.A.TO ended yesterday's trading at C$19.33.
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