Capgemini cuts revenue forecast again as soft markets hit Q3 sales
Adds shares in paragraph 4, analyst comments in paragraphs 5-6
By Leo Marchandon
Oct 30 (Reuters) -French IT consulting group Capgemini CAPP.PA cut its 2024 revenue forecast for the second time this year on Wednesday, after continued weakness in some of its markets, especially manufacturing, hit third-quarter sales.
The company, which offers services ranging from cloud and AI to enterprise management across a wide array of industries, had in July forecast a surprise fall in its annual revenue due to a downturn in the automotive and aerospace sectors.
The Paris-based group now expects its revenue to decline between 2% and 2.4% at a constant currency basis, versus its previous forecast for a drop of 0.5% to 1.5%.
Its shares fell 6.6% by 0902 GMT, among the worst performers of Europe's benchmark STOXX 600 index .STOXX.
"The group lacks momentum in 2024 and potentially in 2025," said Sarah Thirion, analyst at Midcap Partners, pointing to the discretionary nature of spending and Capgemini's exposure to the automotive sector and weak European markets.
However, she added "the prospect of a gradual improvement in profitability remains intact beyond 2025".
Capgemini's third-quarter revenue fell 1.6% at constant exchange rates to 5.38 billion euros ($5.82 billion).
"In a market that remains soft overall, we expect to deliver a similar growth in Q4," CEO Aiman Ezzat said in the statement, though he added the company expected headwinds in tech and telecom sectors to ease gradually.
"Client demand continues to be driven by operational efficiencies and cost reduction and we seize their growing appetite for AI and Gen AI services," Ezzat said.
($1 = 0.9244 euros)
Reporting by Leo Marchandon in Gdansk; editing by Milla Nissi
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