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 per cent to +1 per cent, compared to the previous estimate of between -2 per cent and 2 per cent.
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 per cent year-on-year to 976 million euros.
Revenues stood at 11.11 billion euros, down 0.3 per cent on a reported basis but up 0.2 per cent 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 per cent at market open, but paired gains and were up 0.3 per cent at 0805 GMT.
The group reiterated its full-year operating margin estimate in the 13.3 per cent and 13.5 per cent 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)
