UPDATE 3-Capgemini H1 profits up, more optimistic on 2008
(Adds comments by CEO, analyst; updates share price reaction)
By Dominique Vidalon
PARIS, July 31 (Reuters) - Capgemini (CAPP.PA) said on Thursday it was more optimistic about growth prospects for this year as it had not seen signs of a slowdown and financial clients showed resilience to the credit crisis.
Europe's largest IT services group raised its 2008 revenue growth goal after reporting a forecast-beating 23.4 percent rise in its first-half operating profit.
"The first-half performance strengthens our confidence and reflects a demand that remained sustained," Chief Executive Paul Hermelin told a conference call.
"We now have very good visibility over the third quarter. Of course (negative) things can happen in the fourth quarter. But we have no signs of that," he added.
Operating profit rose to 332 million euros ($518.6 million) from 269 million euros in the same period of 2007, beating the 325 million euro average from a Reuters poll of nine analysts.
Capgemini now expects 2008 like-for-like sales growth of 4-5 percent against previous guidance of 2-5 percent growth. It kept its operating margin target unchanged at 8.5 percent of sales.
Hermelin also said that it was too early to comment on the outlook for 2009 and that Capgemini would have greater visibility in October-November, when clients have sealed their spending budgets.
"To date, even in regions considered sensitive such as the United States, the UK, Sweden, we do not have worrying signs ... Our feeling is that there is a good momentum," he said.
Hermelin also told a news conference that Capgemini could make small acquisitions in Asia and the United States, such as in the consulting sector, in the second-half of this year.
PROFIT TAKING
But the more upbeat tone failed to impress investors, who were taking profits on a stock that has outperformed its sector and the CAC-40 index of French blue chips so far this year.
Oddo Securities said in a note that the stronger-than-expected first-half figures "seemed to have been already priced in" and that it saw "no major positive surprise in guidance".
Citi analysts noted that revenue growth in the United States slowed to 4.7 percent in the second quarter from 6.1 percent in the first quarter. They also said that a 20 basis point increase to 4.7 percent in the operating margin of the outsourcing business in the first-half was too slow.
"After the strong rally over the last days, Cap delivered what it needed to, but the slowdown in the U.S. and slow outsourcing margin improvement are concerns," they said.
Capgemini shares were off 3.5 percent at 40.58 euros in early afternoon trade, underperforming the DJ Stoxx European technology index .SX8P, which was down 0.2 percent.
Capgemini shares have fallen around 6 percent so far this year, outperforming a 23 percent fall in the European technology index and a 22 percent drop in the CAC-40 .FCHI.
Total bookings rose 3.9 percent to 4.327 billion euros.
Revenue eased 0.5 percent to 4.374 billion euros, hit by a weak British pound and U.S. dollar. On a like-for-like basis, revenue rose 5.3 percent, with local professional services and consulting showing the strongest growth.
North America had first-half like-for-like revenue growth of 5.4 percent and an operating margin of 5.8 percent, thanks to strong local professional services and outsourcing. In Europe, all regions except the UK posted "significant growth".
(Reporting by Dominique Vidalon; Editing by Greg Mahlich, Paul Bolding, Andy Bruce)
