(Reuters) -French IT consulting firm Capgemini tightened its guidance for the current financial year on Wednesday, citing caution amid slowing demand in the second quarter and an uncertain economic
Capgemini Revises Annual Revenue Forecast Amid Economic Caution
Capgemini's Revenue Guidance and Market Response
By Enrico Sciacovelli
Current Financial Performance
(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.
Market Reactions and Analyst Insights
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%.
Future Outlook and Strategic Moves
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)
