Yahoo Finance CGI Group (GIB) Q2 Earnings Beat Estimates, Revenues Up Y/Y
CGI Group GIB reported non-GAAP earnings of $1.35 per share in second-quarter fiscal 2023, which beat the Zacks Consensus Estimate by 6.3% and increased 11.6% year over year. In domestic currency (C$) the company reported non-GAAP earnings of $1.82 per share.
Revenues of $2.75 billion beat the consensus mark by 3.77%. At constant currency (cc), the top line increased by 11.4%. In domestic currency (C$) revenues are pegged at $3.72 billion.
The uptick in revenues was led by the following segments: Asia Pacific, up 18.6%; Western and Southern Europe, up 30.5%; Canada, up 7%; and U.S. commercial and state government, up 13.5%.
Top Line Details
Managed IT and Business Process Services contributed 53% to revenues. Growth in CGI Group’s revenues was supported by growing demand among customers and lower operating expenses.
CGI Group, Inc. Price, Consensus and EPS Surprise
CGI Group, Inc. price-consensus-eps-surprise-chart | CGI Group, Inc. Quote
CGI’s product pipeline reflected an increasing demand for managed services as the total value of opportunities increased by 20% sequentially, which contributed to CGI’s second-quarter revenues.
Business, consulting, strategic IT consulting and systems integration services contributed 47% to revenues. Rising demand for CGI Group’s offerings was evident from the company’s rising customer base.
In the second quarter, CGI Group expanded its client relationship with banks, insurance agencies and electricity operators providing solution to support ongoing modernization strategy and digitization of end-to-end processes. This benefited the company’s top-line growth in the quarter under review.
Operating Details
CGI Group reported adjusted EBIT of $600.8 million, which was up 14.7% year over year. Adjusted EBIT margin improved 20 basis points year over year to 16.2%.
In the second quarter, bookings were $3.84 billion, which represented a book-to-bill ratio of 103.3%. As of Mar 31, 2023, CGI Group’s backlog stood at $25.24 billion.
Balance Sheet and Cash Flow
CGI Group had cash and cash equivalent and short-term investments of $1.29 billion, compared with $1.33 billion as of Dec 31, 2022.
As of Mar 31, 2023, CGI Group had total debt of $3.17 billion compared with $3.17 billion as of Dec 31, 2022.
It generated $469 million in cash from operations compared with $605 million in the previous quarter.
Zacks Rank & Other Stocks to Consider
CGI Group currently carries a Zacks Rank #2 (Buy).
CGI Group’s shares have risen 17.7% compared with the Zacks Computer and Technology sector’s increase of 15.2% in the year-to-date period.
Here are some other top-ranked stocks worth considering in the broader sector.
Asure Software ASUR sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Asure’s shares have risen 44.9% in the year-to-date period compared with the Zacks Internet – Delivery Services industry’s decline of 1.8%. ASUR is scheduled to report first-quarter 2023 results on May 8.
Cambium Networks CMBM carries a Zacks Rank #1.
Cambium’s shares have declined 33.6% in the year-to-date period against the Zacks Wireless National industry’s decline of 1.7%. CMBM is scheduled to report first-quarter 2023 results on May 8.
Fortinet FTNT carries a Zacks Rank #1.
FTNT’s shares have risen 28.7% in the year-to-date period compared with the Zacks Internet – Software industry’ rise of 22.5%. Fortinet is scheduled to report first-quarter 2023 results on May 4.
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