TORONTO (Reuters) - Canadian software company CGI Group Inc posted solid profit growth on the back of broad U.S. healthcare business strength on Wednesday, despite losing the contract to manage the U.S. healthcare enrollment website it helped build.
The healthcare.gov site was plagued by error messages and slow speeds for weeks after launch, creating a political headache for the White House. While the lost value of the deal barely dents CGI's quarterly sales, analysts worry about the potential hit the high-profile troubles will have on its reputation.
CGI still managed to grow its backlog of orders, and said it planned to buy back up to 10 percent of its shares in the next year.
The Montreal-based company said it booked C$2.8 billion worth of contracts in the quarter, almost half of it new business, for a book-to-bill ratio of 107 percent.
Book-to-bill refers to the ratio of orders added to the company's backlog versus finished work that can be billed to a client, with analysts eager to see the company get more work than it finishes each quarter, which points to future growth.
CGI's backlog of signed orders grew by C$972 million to stand at C$19.3 billion by the end of December.
The company had a net profit of C$189.8 million ($170 million), or 60 Canadian cents a share. It said revenue rose 4.4 percent to C$2.64 billion.
Excluding the costs of the Logica acquisition, which was completed a year ago, CGI said it made C$207.9 million, or 65 Canadian cents a share, compared with C$137.8 million, or 44 cents a share, a year earlier.
Analysts had on average expected CGI to earn 70 Canadian cents a share on revenue of C$2.64 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Alastair Sharp; Editing by Jeffrey Benkoe and Chizu Nomiyama)