Here is an interesting article about yesterday's numbers and the future outlook for Groupe CGI:
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Wednesday December 2, 6:59 pm Eastern Time
CGI posts record results, aims at IT mega-deals
By Charles Grandmont
MONTREAL, Dec 2 (Reuters) - CGI Group Inc., Canada's largest information technology (IT) services company, on Wednesday reported 1998 revenues tripled from the previous year and said it was poised to pursue multibillion-dollar outsourcing deals.
Montreal-based CGI, sixth-ranked in North America, posted net earnings of C$34.8 million in the latest fiscal year, up from C$7 million in 1997, with earnings per share of C$0.30 against C$0.10. Revenue soared to C$745 million in the year ended September 30, up from C$232 million a year earlier.
''It is a phenomenal growth rate,'' said Josef Vejvoda, an analyst at Levesque Beaubien Geoffrion.
''Some people get nervous when they look at a company that is growing so aggressively. With the backlog of C$6.5 billion they have and the revenue run rate of about C$1.3 billion, you look at almost a guaranteed double again from it's previous year results,'' he said.
Markets acknowledged the results at midday by adding C$1.40 to CGI shares, at C$27.45 on the Toronto stock market.
Fourth-quarter results were boosted by the start of a 10-year, C$4.5 billion outsourcing contract for Bell Canada, a subsidiary of BCE Inc., which owns 43 percent of CGI, noted Louis Wermenlinger, an analyst for Desjardins Securities.
In the last quarter, revenue jumped 324 percent, from C$72.4 million to C$324.5 million. Earnings surged from C$2.9 million to C$16.1 million.
Fourth-quarter earnings per share amounted to almost half the full year's year earnings, rising from C$0.03 per share to C$0.13 per share.
With a critical mass of more than a billion of revenue run rate, CGI said it intends to pursue a North American mega-deal in information technology outsourcing, similar to the US$2 billion contract awarded recently by Boeing to IBM.
''The fact that BCE sort of stepped up and gave them Bell Sygma vaulted them to a new level where they will now be invited to compete for some of the largest contracts in North America'', Vejvoda said.
The Global outsourcing market should reach US$121 billion by year 2000, with a compound annual growth rate of more than 10 percent, according to data research firm International Data Corp. |
