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View All NewsCTG revenue falls 12%
Second-quarter revenue fell 11.9% year over year to $83.5 million at Computer Task Group Inc. (NASD: CTG). Revenue at the Buffalo, NY-based IT staffing provider primarily reflects a decrease in staffing revenue at significant staffing customers and the continued trail-off of legacy electronic medical records account business, according to the company.
Net income rose to $1.3 million from $554,000 in last year’s second quarter. Results included approximately $700,000 in foreign payroll tax credits, as well as $2.1 million in charges for a European workforce reduction and the write-off of the company’s medical management software.
| (US$ thousands) | Q2 2016 | Q2 2015 | % change |
| Revenue | $83,486 | $94,744 | -11.9% |
| Gross margin percentage | 19.1% | 16.5% | |
| Net loss/income | $1,259 | $554 | 127.3% |
CTG appointed Arthur “Bud” Crumlish as the company’s president and CEO, effective July 21. Crumlish will also serve on the board.
Quote
“Second-quarter earnings exceeded our guidance, due primarily to a $0.03 foreign payroll tax credit; quarterly earnings excluding the credit were at the high end of guidance,” Crumlish said. “However, revenue in the quarter was below our expectations, largely reflecting weakness at significant staffing customers.”
Revenue by segment and geography
| (US$ thousands) | Q2 2016 | Q2 2015 | % change |
| Revenue by segment | |||
| IT staffing | $58,860 | $62,582 | -5.9% |
| IT Solutions | $24,625 | $32,162 | -23.4% |
| North American revenue | $65,302 | $78,085 | -16.4% |
| European revenue | $18,184 | $16,659 | 9.2% |
Guidance
CTG expects third-quarter revenue to range between $79.0 and $81.0 million, and full-year 2016 revenue to range between $328.0 and $334.0 million.
Share price and market cap
Shares in CTG fell 5.96% in early afternoon trading to $5.13 and the firm had a market cap of $83.48 million, according to Yahoo!