Capgemini keeps FY targets after first-quarter sales rise

Reuters News
Posted: May 10, 2012 4:01 PM
Capgemini keeps FY targets after first-quarter sales rise

PARIS (Reuters) - Europe's largest computer consultancy, Capgemini, confirmed its full-year targets on Thursday after posting higher-than-expected sales in the first quarter driven by technology services and double-digit growth in North America.

Capgemini reported 4.3 percent organic growth in sales to 2.565 billion euros ($3.32 billion), above the average market forecast of 2.464 billion cited by analysts.

Shares in the Paris-listed company were up 2.2 percent at 0725 GMT, after rising close to 4 percent at the market open, giving Capgemini a market value of 4.5 billion euros.

"The good performance this quarter allows ... Capgemini to confirm its guidance for 2012 despite economic uncertainties," CM-CIC Securities analyst Dov Levy wrote. "While the guidance remains the same, the tone of the publication seems to us to be more optimistic."

Sales in North America, which remained the biggest contributor to growth in the quarter, grew 13 percent to 505 million euros while revenue in Benelux continued to decline.

"We have the feeling that this year is starting fairly well with a good level of demand in several markets, particularly North America," Chief Executive Paul Hermelin told a conference call.

Consulting, local professional and technology services performed on average better than outsourcing services, especially the latter, which grew 6.6 percent over the quarter and brought more than 40 percent of revenue.

Capgemini - which competes with IBM, Logica and French peer Atos - reiterated its targets for limited organic growth in revenue this year, due to public sector cost cuts, and an increase in the operating margin.

"We approach the coming months with a certain serenity but also with caution because we must say that markets are volatile," Hermelin added.

($1 = 0.7733 euros)

(Reporting by Alice Cannet; Editing by James Regan)