CGI Group Q4 Earnings Meet View, But Revenues Miss

(RTTNews) - Canadian IT and business processing services provider CGI Group, Inc. (GIB, GIB_A.TO) reported Thursday a profit for the fourth quarter that surged from last year, reflecting lower charges and revenue growth. Adjusted earnings per share matched analysts' expectations, while quarterly revenues missed their estimates.

"I am very pleased with the strong performance delivered in the fourth quarter and throughout fiscal 2014. After two years and an investment of $575 million, the Logica integration program is complete, yielding annual cost synergies in excess of $400 million. Since closing the acquisition, CGI earnings per share have grown by more than 85%," President and CEO Michael Roach said in a statement.

The Montreal, Canada-based company reported net earnings of C$213.7 million or C$0.67 per share for the fourth quarter, higher than C$141.0 million or C$0.44 per share in the prior-year quarter.

Results for the latest quarter include $49.2 million in integration-related costs net of tax, offset by the positive resolution of acquisition-related provisions in the amount of $28.9 million net of tax. Meanwhile, the year-ago quarter included $46.6 million of integration-related costs net of tax and unfavourable tax adjustments of $26.0 million.

Excluding items, adjusted net earnings for the quarter was C$234.0 million or C$0.73 per share, compared to C$213.6 million or C$0.67 per share in the year-ago quarter.

On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of C$0.73 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter grew 1.0 percent to C$2.48 billion from C$2.46 billion in the same quarter last year, but missed thirteen Wall Street analysts' consensus estimate of C$2.57 billion.

During the quarter, CGI booked C$2.05 billion in new contract wins, extensions and renewals, compared to C$2.50 billion in the year-ago quarter. At the end of fourth quarter, the company's backlog of signed orders stood at C$18.24 billion, down from C$18.68 billion at the end of the year-ago period.

"We remain focused on achieving further accretion by realizing incremental cost and revenue synergies. In summary, we begin fiscal 2015 in an excellent position strategically, operationally and financially," Roach added.

GIB closed Wednesday's regular trading session at $34.86, down $0.02 on a volume of 0.28 million shares, and GIB-A.TO closed on the Toronto stock exchange at C$39.46, down C$0.04 on a volume of 0.97 million shares.