The Successful Investor Hotline – Friday, May 3, 2013

Article Excerpt

CGI GROUP INC., $31.31, Toronto symbol GIB.A, jumped 15% this week after the company reported much better-than-expected quarterly results. CGI is Canada’s largest provider of computer outsourcing services. The company helps its clients automate certain routine functions, like accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses. In August 2012, CGI completed its $2.7-billion purchase of Logica plc, a U.K.-based firm that provides computer-outsourcing services in 36 countries. Thanks to this purchase, CGI’s earnings rose 66.3% in its 2013 second quarter, which ended March 31, 2013, to $175.9 million from $105.7 million a year earlier. Due to more shares outstanding, earnings per share rose a slower rate of 40.0%, to $0.56 from $0.40. These figures exclude unusual items, such as costs to integrate Logica. On that basis, the latest earnings beat the consensus estimate of $0.50 a share. Revenue soared 137.0%, to $2.5 billion from $1.1 billion. In addition to the contribution from Logica, CGI…