-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
CGI posted Mar-Q sales of CAD4.16B (+3% Y/Y), missing consensus (CAD4.24B), with constant currency growth decelerating to 1.6% from 3.4% in the prior quarter. Adjusted EPS of CAD2.27 (+7%) met expectations despite the sales miss, supported by 10 bps margin expansion to 16.6% with notable improvements in U.S. Commercial/State (+180 bps Y/Y) and Canada (+230 bps Y/Y). Segment revenue performance was mixed, with U.K. and Australia leading at +19% Y/Y while U.S. Federal continued its decline at -11% Y/Y amid ongoing spending cuts. Bookings deteriorated, with book-to-bill falling to 103.8% from 109.5% in the prior quarter and TTM declining to 108.4% from 110.4%; however, CGI's acquisition-supported CAD31.5B backlog still grew slightly and provides solid visibility, with CAD11.5B expected to convert over the next twelve months. We expect continued headwinds from U.S. Federal weakness and slower bookings momentum, though we hesitate to attribute the weakness to AI competition (contrary to IT Services bears).