Capgemini narrows full-year guidance as it heads into uncertain third-quarter
By Enrico Sciacovelli
(Reuters) -French IT consulting firm Capgemini tightened its full-year revenue guidance on Wednesday, while citing caution amid soft demand and an uncertain economic environment.
The firm, whose services range from cloud and AI to enterprise management across a wide array of industries, now estimates full-year revenue growth at constant currency in a range of -1% to +1%, compared to the previous estimate of between -2% and 2%.
It also approved a multi-year share buyback program of 2 billion euros ($2.3 billion).
"Going into Q3, we see some stability in the environment, while we retain our cautious stance to account for the uncertainty created by geopolitical tensions and a slow economy," CEO Aiman Ezzat said in a statement.
Capgemini's operating profit for the first half of the year fell 15% year-on-year to 976 million euros.
Revenues stood at 11.11 billion euros, down 0.3% on a reported basis but up 0.2% at constant exchange rates. Demand was soft in the first half as clients slashed non-essential spending, the company said.
Analysts at Jefferies said in a note that the second-quarter figures were solid "but against a backdrop of soft sub-sector newsflow, we doubt the results are sufficient to materially change investor sentiment."
Shares in Capgemini rose as much as 6.9% at market open, but paired gains and were up 0.3% at 0805 GMT.
The group reiterated its full-year operating margin estimate in the 13.3% and 13.5% range and said its targets do not include the impact of the proposed acquisition of technology outsourcing firm WNS.
In July, Capgemini agreed to buy U.S.-listed WNS for $3.3 billion in cash to expand the range of AI tools it offers for companies.
($1 = 0.8659 euros)
(Reporting by Enrico Sciacovelli, additional reporting by Tristan Veyet; Editing by Mrigank Dhaniwala and Matt Scuffham)
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