CGI profit falls on weaker margins, lower revenue
(Reuters) - CGI Group Inc (GIBa.TO: Quote) posted a 16 percent fall in first-quarter profit as Canada's largest technology outsourcing and consulting company recorded thinner margins and weaker revenue.
Net earnings fell to C$106.5 million, or 40 Canadian cents a share, from C$126.7 million, or 45 Canadian cents a share, a year ago, the company said in a statement.
Revenue for the quarter fell 5.5 percent to C$1.03 billion.
Analysts had on average expected CGI to earn 40 Canadian cents a share on revenue of C$1.08 billion, according to Thomson Reuters I/B/E/S.
Net margin fell to 10.3 percent from 11.6 percent.
The Montreal-based company, which gets a solid base of its recurring revenue from long-term outsourcing contracts, said it signed new contracts worth C$1.39 billion in the quarter.
CGI, which has spent more than C$300 million on share buybacks in the last year, is facing rising pressure to switch at least some of that return to investors as a dividend.
The company said it will buy up to 22.1 million shares of its common stock during the next year.
Shares of the company, which have lost almost 15 percent in value in the last seven months, closed at C$20.25 on Tuesday on the Toronto Stock Exchange.
(Reporting by Arnav Das Sharma in Bangalore; Editing by Supriya Kurane)
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