CGI Group Inc., $19.54, symbol GIB.A on Toronto, is Canada’s largest provider of computer-outsourcing services. The company’s services help its customers automate certain routine functions, such as accounting and buying supplies. That makes its clients more efficient, and lets them focus on their main businesses.
CGI is one of the value stock picks we analyze in our Successful Investor newsletter.
In its fiscal 2011 first quarter, which ended December 31, 2010, CGI earned $126.6 million. That’s up 13.8% from $111.2 million a year earlier. The company paid $81.0 million to buy back shares during the quarter. Due to fewer shares outstanding, earnings per share rose 21.6%, to $0.45 from $0.37. That beat the consensus earnings estimate of $0.34 a share.
Revenue rose 22.7%, to $1.1 billion from $913.0 million a year earlier. If you exclude the negative impact of exchange rates, revenue would have risen 25.9%. Canadian revenue rose 0.5%, but U.S. sales jumped 77.1%, because the company won a number of new federal government contracts. The U.S. gain also reflects the contribution of Stanley Inc., which CGI bought last year.
CGI booked $1.2 billion in new contracts during the quarter. The U.S. accounted for 60% of these orders, followed by Canada (35%) and Europe (5%). With extensions and renewals, that brought the total to over $4.2 billion in the last 12 months. Its overall backlog was $13.1 billion at the end of the quarter, up from $11.4 billion a year earlier.
CGI plans to buy back up to 23 million, or 10% of its common shares, during its 2011 fiscal year.
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