CGI Group ( GIB Quick Quote GIB - Free Report) reported third-quarter 2022 non-GAAP earnings of $1.21 per share, which beat the Zacks Consensus Estimate by 2.54% and improved 9% year over year.
Revenues of $2.55 billion beat the consensus mark by 0.25%. At constant currency (cc), the top line increased by11.5%.
The growth in revenues was led by the following segments: Asia Pacific, up 23.3%; Western and Southern Europe, up 23.2%; Canada, up 18.2%; and U.S. commercial and state government, up 13.6%.
Top Line Details
Managed IT and Business Process Services accounted for 54% of revenues. Growth in CGI Group’s revenues was supported by growing demand among customers to decrease operating expenses. Nearly 60% of CGI Group’s clients are looking to reduce operating expenses due to rising inflation. Consequently, demand for managed services increased by 13%, which contributed to CGI’s third-quarter revenues.
Business, consulting, strategic IT consulting and systems integration services accounted for 46% of revenues. Rising demand for CGI Group’s offerings was evident from the company’s rising partnership base.
In the third quarter, CGI Group completed two partnerships — first with IGM Financial in Canada for a mutual fund transfer agency platform; and second with a global bank in France for a solution to streamline retail banking end-to-end processes. This benefited the company’s top-line growth in the quarter under review.
CGI Group reported adjusted EBIT of $519.9 million, which was up 9.0% year over year. Adjusted EBIT margin improved by 20 basis points year over year to 16.0%.
In the third quarter, bookings were $3.41 billion, which represented a book-to-bill ratio of 104.7%. As of Jun 30, 2022, CGI Group’s backlog stood at $23.24 billion.
Balance Sheet and Cash Flow
CGI Group had cash and cash equivalent and short-term investments of $784.1 million, compared with $1.06 billion as of Mar 31, 2022.
As of Jun 31, 2022, CGI Group had total debt of $3.6 billion, compared with $3.52 million as of Mar 31, 2022.
It generated $419.2 million in cash from operations compared with $472.6 million in the previous quarter.
Zacks Rank & Stocks to Consider
CGI Group currently carries a Zacks Rank #3 (Hold).
CGI Group’s shares have fallen 3.4% compared with the Zacks
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