MONTRÉAL - CGI Group Inc . (NYSE:GIB) reported second-quarter earnings that exceeded analysts' expectations, bolstered by a modest year-over-year revenue increase and strong net earnings growth.
The company announced an adjusted EPS of Cdn$1.97 for the quarter, which was Cdn$0.54 higher than the analyst consensus of Cdn$1.43. Revenue for the quarter was Cdn$3.74 billion, significantly surpassing the consensus estimate of Cdn$2.77 billion and marking a 0.7% increase from the same quarter last year. GIB stock was trading up 1.14% premarket Wednesday.
In a statement released on May 1, 2024, George D. Schindler, President and Chief Executive Officer of CGI, highlighted the company's ability to continue delivering shareholder value with strong net earnings and cash generation despite uncertain economic conditions affecting some client industries. Schindler attributed the company's success to its comprehensive portfolio of services and its commitment to partnering with clients for value creation and future growth.
CGI's revenue of Cdn$3.74 billion represents stability in constant currency terms compared to the previous year. The company's earnings before income taxes rose to Cdn$577.4 million, a 2.3% increase year-over-year, resulting in a margin of 15.4%. Adjusted EBIT also saw an uptick, reaching Cdn$628.5 million, up 4.6% from last year, with a margin improvement to 16.8%.
Net earnings for the quarter stood at Cdn$426.9 million, up 1.8% from the previous year, while the net margin was reported at 11.4%. Excluding specific items, net earnings were Cdn$459.4 million, reflecting a 5.6% increase year-over-year and a margin of 12.3%. The diluted EPS, excluding specific items, climbed by 8.2% to Cdn$1.97, up from Cdn$1.82 in the same period last year.
The company's cash from operating activities was robust at Cdn$502.0 million, representing 13.4% of revenue. Bookings for the quarter reached Cdn$3.75 billion, with a book-to-bill ratio of 100.4%. CGI's backlog expanded to Cdn$26.82 billion, equating to 1.9 times the annual revenue.
CGI's financial health was further evidenced by a reduction in long-term debt and lease liabilities, which decreased to Cdn$3.03 billion from Cdn$3.85 billion a year earlier, and a lower net debt position of Cdn$1.73 billion, down from Cdn$2.53 billion. The net debt-to-capitalization ratio improved to 16.4%, a significant reduction from the previous year's 24.0%.
CGI's commitment to delivering value was further emphasized by Schindler, who stated, "Through CGI's portfolio of end-to-end service offerings, which are designed to deliver tangible and trusted business outcomes, we continue to partner with clients to bring value now and to position CGI for future profitable growth opportunities."
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.