Boston, MA 05/01/2014 (wallstreetpr) – CGI Group Inc. (USA) (NYSE:GIB) is a computer services provider based in Canada. The company is best known for the role in the botched Obamacare rollout plan. While the company lost U.S. contracts at the federal level as revealed in the latest quarter, it retains footprint at states level and expects a recovery in the U.S. market by the second half.
Though CGI Group Inc. (USA) (NYSE:GIB) noted the impact of loss of business in the U.S., the CEO Michael Roach observed that the U.S. project was not only complicated, but also one whose aftermath has been blown out of proportion. Therefore, the CEO said the reality on the ground and the perception in the press show a big gap.
Strong Q22014 data
CGI Group Inc. (USA) (NYSE:GIB) benefited from strong demand from overseas, and a favorable currency conversion, which helped to offset the weakness that the company met in the U.S. market. The company’s growth in Europe also took a flight, thanks to the 2012 acquisition of Logica, formerly a British rival.
CGI Group Inc. (USA) (NYSE:GIB) reported a net profit of C$230.9 million, reflecting C$0.73 per share. That was better than C$114.2 million or C$0.36 per share that the company realized in Q22013.
Furthermore, CGI Group Inc. (USA) (NYSE:GIB) significantly improved its cash flow position in the latest quarter. It generated cash flow of C$350 million or $319 million from operations. That signaled a compelling rebound from a disappointing cash flow position in the previous quarter.
Revenue in the latest quarter was up 7 percent to $2.7 billion. CGI Group Inc. (USA) (NYSE:GIB) receives revenue in different currencies because of its overseas operations, but it reports in Canadian currently.
Validating position of Logica
The latest results not only reveal a company strongly on the way upwards, but also validate the acquisition of Logica. Some investors had issues over the cash contribution from Logica, but the strong growth in revenue in Europe answers that concern.
With a strong grip in European markets and ongoing reputation repair in the U.S., CGI Group Inc. (USA) (NYSE:GIB) expects to perform even better given that it still has an opportunity to work on the U.S. health exchanges program at the state level. In any case, bookings increased significantly in the second quarter.
