Third-quarter revenue fell 5.2% at Computer Task Group Inc. (NASD: CTG), with the company reporting the decrease primarily reflects reduced demand from the largest staffing clients. However, the Buffalo, NY-based IT staffing and services provider noted European revenue rose 18.9%.

CTG lowered its full-year revenue forecast, but it also reported the formalization of a definitive three-year strategic plan for growth. Additionally, the company said it landed a two-year extension on existing services contract with its largest staffing client, finalized a new contract with a large public university system, and secured a global IT services contract with a large, existing client that has the potential to “significantly expand” its North American footprint in 2018.

CTG also reported net income of $40,000 compared to a net loss of $16.2 million in the third quarter of last year — which included a noncash goodwill impairment charge of $15.8 million.

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“Our revised full-year revenue guidance reflects the continued soft demand from several of our large staffing clients,” CFO John Laubacker said.

“The impact of higher medical-related costs will exceed the progress from our diligent cost management initiatives during the second half of this year,” Laubacker said. “However, we remain encouraged by the additional business we have landed to-date, which converts our sales pipeline to future revenue and will increasingly begin contributing to our results in future quarters. Combined with further expected progress on what is still a very healthy pipeline of new clients and projects, we believe we are well positioned to achieve revenue growth and increased profitability in 2018.”

Revenue by segment and geography

Guidance

CTG expects fourth-quarter revenue to range between $72.0 million and $75.0 million.

For the full year 2017, CTG now expects revenue to range between $298.5 million and $301.5 million; this is down from guidance of between $305.0 million and $315.0 million provided with the second-quarter earnings report and between $312.0 million and $332.0 million provided with the first-quarter report.

“Our revised full-year revenue guidance reflects the continued soft deman from several of our large staffing clients,” said CFO John Laubacker.

Share price and market cap

Shares in CTG fell 2.99% in early afternoon trading today to $5.18 and the firm had a market cap of $81.3 million, according to Yahoo.