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CTG revenue falls 10%

April 22, 2014

CTG (NASD: CTG), a Buffalo, N.Y.-based information technology services company, reported first-quarter revenue fell 9.8 percent year over year to $97.9 million. Lower revenue in CTG’s healthcare and staffing businesses in North America was partially offset by higher revenue from European operations and decreased operating expenses. Earnings in the quarter also reflected the absence of tax credits which contributed to net income in the 2013 first quarter.

Staffing revenue fell 10 percent to $59.3 million in the first quarter, and solutions revenue fell 10 percent to $38.6 million.

Net income fell 22.0 percent year over year to approximately $3.2 million in the first quarter. However, gross margin increased to 21.4 percent from 20.8 percent in the year-ago quarter.

Shares in CTG fell 0.58 percent in early afternoon trading to $16.19 and the firm had a market cap of $298.79 million, according to Yahoo!

“CTG’s first-quarter financial results were consistent with our guidance with earnings at the midpoint of the range and revenue at the low end,” said Chairman and CEO James Boldt. “Earnings benefited from the completion of a medical claims data analytics project originally scheduled to wrap up last year, continued cost control, and growth in Europe, which reduced the impact of a significantly higher tax rate this quarter and the lower revenue levels we expected in our U.S. health IT and staffing businesses.”

European revenue rose 7.2 percent to $20.8 million in the first quarter.

The company expects second-quarter revenue of between $101 million and $103 million, down 5 percent at the range midpoint because of muted spending from healthcare providers. CTG also revised its full-year 2014 revenue prediction to between $393 million and $407 million — also down 5 percent at the range midpoint — from the prediction of between $393 million and $407 million provided in its fourth-quarter report.