US tax reform, long-term IT demand bode well for Montreal-based CGI
The “digital revolution” that extended the internet’s reach, spurred the mass adoption of mobile devices and increased the use of artificial intelligence has ensured that demand for IT professionals will be very strong for years to come, said CGI chair Serge Godin.
Source: Paul Chiasson
What started as back office support is now at the core of organizations and how they operate, Godin told shareholders at its annual meeting on Wednesday in Montreal.
“It is easy to imagine that the number of IT-related talents required by our clients will, at least, double over the next decade.”
With its focus on technology, CGI is better able than most companies to attract top talent.
“As an IT professional in CGI, you’re the core of the business,” said CGI President George Schindler, in an interview.
CGI Group Inc. said it expects global tax changes, particularly in the United States which accounts for about 30 per cent of revenues, will increase its profit this year by about $40 million or about four per cent of last year’s net earnings.
Most of the gain comes from Washington’s move to cut the U.S. corporate tax rate to 21 per cent from 35 per cent and a repatriation tax rate.
There has also been a tax cut in Belgium to 25 per cent. Both are partially offset by a one-time five per cent corporate surtax imposed in France.
CGI said it sees large opportunities for growth by the U.S. federal government despite the ongoing threat of a shutdown.
There was little impact from the recent brief shutdown but another closure could be more challenging if it is long, which few predict, Schindler earlier told analysts during a conference call.
However, he said some spending isn’t dependent on a new budget or is obligatory. The company prepared for the last shutdown by doing work ahead of time.
CGI said Wednesday it earned $285.3 million or 98 cents per diluted share in its first quarter, up from $275.7 million or 89 cents per share a year earlier.
Revenue for the quarter ended Dec. 31 totalled $2.82 billion, up from $2.68 billion.
Excluding specific items, CGI said it earned $288.0 million or 99 cents per diluted share for the quarter, up from $277.6 million or 90 cents per diluted share a year earlier.
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