MONTREAL - Information-technology services firm CGI Group Inc. (TSX:GIB.A) is anticipating continued growth in 2008 after capping its fiscal year by boosting fourth-quarter earnings 66 per cent to $65.6 million and winning a $91.8 million federal contract.
The Montreal-based firm said Wednesday its earnings amounted to 20 cents a share and compared with a profit of $39.5 million or 12 cents per share in the same period of 2006.
"Overall, we are entering fiscal 2008 with an excellent foundation for continued strength," CEO Michael Roach said during a conference call.
"We have deep client relationships and retained and attracted the best talent in the business while delivering superior returns to our shareholders."
Revenue for the quarter rose 9.1 per cent to $922.8 million despite an $18.4-million hit from the rising Canadian dollar's impact on foreign revenue.
For the full year, CGI posted a profit of $236.4 million or 71 cents per share, up 61 per cent from the $146.5 million or 40 cents per share it earned in 2006 as revenue rose 6.7 per cent to $3.71 billion.
Under the federal Public Works contract, CGI will provide engineering and technical management services to the information technology services branch of the department.
The contract, which was subject to a legal challenge by competitor TPG Technology Consulting Ltd., includes an option for four one-year extensions and could be valued at up to $400 million "when considering growth and service transformation."
CGI foresees opportunities to grow its Canadian business despite already being the dominant player in the country.
Its Canadian revenues increased by six per cent in 2007 and accounted for 59 per cent of its global sales. The U.S. represented 33 per cent of revenues, with eight per cent coming from Europe and Asia Pacific.
CGI said it is working on a pipeline of provincial and federal government projects, expects the rising Canadian dollar to push clients to invest more in information technology and enhance its cross-selling of products.
The company also said its 2007 bookings and backlog will be reduced by $200 million after CAE Inc. (TSX:CAE) and CGI mutually decided, after conducting due diligence, not to pursue a signed 10-year IT outsourcing contract.
The deal would have made CGI responsible for most information-technology functions at the Montreal-headquartered international provider of simulation systems and flight training.
CGI shares gained 72 cents or 7.3 per cent to $10.58 in trading Wednesday morning on the Toronto Stock Exchange.
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