CGI’s 2006 revenue, net earnings dip

CGI Group Inc. (TSX: GIB.A; NYSE: GIB) has reported 2006 revenue of Cdn$3.48 billion.
“This is Cdn$208 million lower than fiscal 2005, driven by the negative impact of a strengthening Canadian dollar (Cdn$106.4 million) as well as lower BCE work volumes (Cdn$114.7 million),” the company said in an online statement.
“Overall, 2006 was a year of repositioning for our next wave of growth,” said CGI president and CEO Michael E. Roach in a press release. “Despite the revenue challenges posed by the continued strength of the Canadian dollar as well as the reduction in BCE work volumes, we kept focused on the fundamentals, gradually improving our bottom line throughout the year and finishing 2006 with Q4 profit margins among the industry leaders.”
Net earnings from continuing operations were Cdn$191.3 million before restructuring costs, compared to Cdn$219.7 million in fiscal 2005.
Revenue in 2006 Q4 was lower compared with the fourth quarter of 2005 due to a decrease in revenue from one of the company’s largest customers, BCE, as well as the negative impact of currency, the company announced.
The impact of the currency change, when compared with the fourth quarter of 2005, was Cdn$22.9 million. BCE work volumes were Cdn$40.9 million lower than 2005 Q4. On a sequential basis, BCE work volumes were flat compared with the third quarter of 2006.
“We remain focused on driving our full offering strategy, systematically meeting existing clients and targeting new ones, cross-selling and introducing our capabilities in business transformation, allowing our clients to benefit from state-of-the-art technologies, practices and solutions,” Roach said. “To date, we have successfully renewed contracts ahead of schedule with some clients and added new services to others.
“Moving into 2007, we’re well-positioned for profitable growth, given our stable revenue foundation, supported by a deep backlog and healthy sales funnel.”