The 10-second takeaway
For the quarter ended June 30 (Q3), CGI Group beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share expanded significantly.
Margins contracted across the board.
CGI Group logged revenue of $2.44 billion. The 16 analysts polled by S&P Capital IQ expected sales of $2.39 billion on the same basis. GAAP reported sales were much higher than the prior-year quarter's $1.04 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.60. The 15 earnings estimates compiled by S&P Capital IQ averaged $0.55 per share. Non-GAAP EPS of $0.60 for Q3 were 67% higher than the prior-year quarter's $0.36 per share. GAAP EPS of $0.53 for Q3 were 66% higher than the prior-year quarter's $0.32 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 11.4%, 190 basis points worse than the prior-year quarter. Operating margin was 11.4%, 190 basis points worse than the prior-year quarter. Net margin was 6.9%, 130 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.42 billion. On the bottom line, the average EPS estimate is $0.58.
Next year's average estimate for revenue is $9.80 billion. The average EPS estimate is $2.13.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 236 members out of 244 rating the stock outperform, and eight members rating it underperform. Among 72 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 71 give CGI Group a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on CGI Group is outperform, with an average price target of $30.39.
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