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CTG’s third-quarter revenue falls 4%

October 27, 2015

Third-quarter revenue fell 3.8% to $93.1 million at Computer Task Group Inc. (NASD: CTG). Revenue at the Buffalo, NY-based IT staffing provider was impacted by the continued decline of CTG’s electronic medical records business, a reduction in staffing headcount at a large customer and $3.1 million of unfavorable currency impact in the quarter.

IT staffing revenue rose 2.4% while IT solutions revenue fell 14.7%.

However, diluted earnings per share of 13 cents was above guidance of 10 cents to 12 cents.

(US$ thousands) Q3 2015 Q3 2014 % growth
Revenue $93,055 $96,760 -3.8%
Gross margin percentage 18.8% 19.7%  
Net income $2,071 $2,726 -24.0%

Quote

 “While the current environment continues to be challenging for many of our customers, we remain committed to enhancing our leadership, sales and technical capabilities to elevate the value that CTG provides,” CEO Cliff Bleustein said.

 “Strategic staffing services reflected our ability to partially mitigate the pressure from the lower headcount by closely aligning services with both our direct customers and their end customers,” Bleustein said. “We also continued to invest in additional capacity to drive growth in this business, including a 33% increase in recruiting staff year-to-date, a number of new sales roles to support business development, and a search for a vice president.”

Revenue by segment and geography

(US$ thousands) Q3 2015 Q3 2014 % growth
Revenue by segment      
IT Staffing $62,956 $61,466 2.4%
IT Solutions $30,099 $35,294 -14.7%
       
North American revenue $76,819 $78,430 -2.1%
European revenue $16,236 $18,330 -11.4%

Guidance

CTG expects fourth-quarter revenue to range between $87 million and $89 million, and full-year 2015 revenue to range between $373 million and $375 million.

Share price and market cap

Shares in CTG rose 0.99% in early afternoon trading to $7.13. The firm had a market cap of $134.42 million, according to Yahoo!