CGI revenue soars following acquisition but costs erode net income

IT services company CGI Group Inc. (TSX:GIB.A) says revenue hit $2.53 billion in its fiscal first-quarter, up 147.5 per cent from a year earlier and slightly above analyst estimates.

The explosive revenue growth was due largely to the Montreal-based company’s $2.7-billion purchase of U.K. information technology provider Logica PLC last August, during the company’s fiscal fourth quarter.

The acquisition resulted in higher integration expenses in the 2013 first quarter than analysts expected as year-over-year quarterly profits declined sharply.

However, Logica has been seen as a long-term strategic acquisition building CGI’s presence throughout Europe.

“I am very pleased with our overall performance and with the progress we made with respect to executing our Logica integration plan, which is designed to create incremental and long-term value for all stakeholders,” Michael E. Roach, CGI’s president and chief executive officer said in releasing the results Wednesday.

“Our clients continue to respond in a positive manner to the expanded scale and scope of our offerings and operations following our merger.”
CGI’s net income was $22.4 million or seven cents per share, after including $153.4 million of costs related to the takeover. On an adjusted basis, CGI reported 44 cents per share of earnings for the quarter – a penny short of estimates compiled by Thomson Reuters.

A year earlier, CGI’s net income was $106.5 million or 40 cents per share, with $1.03 billion of revenue.

The Montreal-based company, which has roughly 2,000 employees in Ottawa, is the world’s fifth-largest independent provider of computer, communications and other information technology services for large organizations.

During the quarter, it booked $2.8 billion in new contract wins, extensions and renewals, bringing the last 12-month booking total to $6.6 billion, or 106 per cent of revenue.

At the end of December, CGI’s backlog of signed orders stood at $18.3 billion, up $4.7 billion compared with the same period last year.

Besides its earnings report, CGI announced a renewed share buyback program. The company’s board has authorized CGI to repurchased up to 10 per cent of its public float, although management isn’t obliged to do so.

Last year, CGI spent an average of $20.68 per share for a total of $21.7 million to buy back about 1.1 million shares.

Analysts had estimated CGI’s adjusted earnings would increase by more than 15 per cent to 45 cents per share, a penny higher than reported. Revenue slightly exceeded expectations of just under $2.5 billion.

On Monday, CGI announced the extension of its decade-long payroll services contract with Quebec financial co-operative Desjardins Group for five years at an estimated price of $180 million.

CGI will continue to manage all of the operations for the payroll services centre dedicated to Desjardins’ customers. This includes technology infrastructure, support and development of the payroll and human resources management solutions, payroll processing, and customer support.

Thanks to the Business Journal for this Article

SaskTel’s LTE Network Launching Today

Saskatchewan telco SaskTel is launching its 4G LTE mobile network today, initially covering Regina and Saskatoon, with other locations including Pense and White City earmarked for coverage in the short term, CTV reports. SaskTel aims to expand the network to Swift Current, Moose Jaw, Balgonie, Estevan, Weyburn and Yorkton by the end of 2013.

Thanks to TeleGeography for this update

Rogers sees big things for M2M

Canada’s Rogers Communications declared yesterday that it expects to power over one million Machine-to-Machine (M2M) connections and that it will bring a cloud-based hosted data analytics offering to market before the end of this year. The company plans to grow its traditional M2M business to include big data and analytics as well as professional and managed services, and expects the market revenue for the overall M2M ecosystem in Canada will reach approximately USD1 billion in the next three years.

As part of its commitment to accelerate the adoption and development of connected technology, Rogers has opened a third Wireless Innovation Centre in Toronto, adding to similar facilities in Montreal and Vancouver. The centres offer an interactive experience with the latest M2M technology and enterprise mobility applications from partners. Solutions showcased include wireless asset tracking, wireless backup connectivity, digital signage, video surveillance, point of sale and data analytics applications. Hands-on demos of technology that businesses and consumers use today are also featured including ATMs, parking meters and GPS locating tools. Rogers expects vertical industries will increasingly embrace these types of connected solutions – particularly healthcare, retail, transportation, energy and utilities.

Thanks to TeleGeography for this Article

Telus’ LTE reaches Thunder Bay, nearly 70% of population

Canada’s Telus has announced the latest expansion of its 4G Long Term Evolution (LTE) mobile broadband network with a launch of services covering Thunder Bay, Ontario. Telus says that the latest rollout means that its LTE coverage now reaches ‘nearly’ 70% of the Canadian population, and it will continue to expand the 4G network footprint throughout the coming year.

Thanks to TeleGeography for this article

Network Performance is More Business Critical Than Ever

Net Optics Network Performance Management is More Business Critical Than EverNetwork Performance is More Business Critical Than Ever

Here at Net Optics, we’ve been seeing a new vision for IT and the Network solidify in businesses. The changing role of Network Admins has gone from providing basic access and security for in-office employees to delivering and supporting revenue enhancing tools and services for every employee, regardless of device, location or application.

This trend was echoed by Mark McDonald, group vice president for Gartner Executive Programs and Gartner Fellow who suggests “Effective leaders use technology, which includes IT, to strengthen the customer experience and eliminate costly internal distortions. They are using technology to ’amplify’ the enterprise.” (http://www.gartner.com/it/page.jsp?id=1897514)

Amplified Business Equals Amplified Challenges

At Net Optics we’re acutely aware of the impact this new emphasis on technology will have on the Network and Network Administrators. Conflicting demands from users, new devices, new applications, and security & compliance regulations are increasing the pressure to adapt and maintain the Network while meeting stringent SLAs.

Net Optics envisions a seamless, end-to-end Access and Monitoring Architecture that delivers total visibility and transcends the physical/virtual concept to enable robust and responsive security, performance, low latency and manageability. This new architecture focuses on applications and access capabilities from corporate headquarters and across the distributed organization. Flexibility and responsiveness to change must be built into the fabric of the access infrastructure.

Thanks to Net Optics for this

 

Troubleshooting 10 Gb: Are You Storing Enough?

If you rely on long-term packet capture appliances like GigaStor™ for troubleshooting, it’s essential to consider upgrading the appliance’s storage capacity whenever network bandwidth is increased. This is an often over-looked issue that you’ll want to consider and budget for, before rolling out 10 Gb.

The following graph illustrates how increases in network bandwidth and utilization impact the amount of time that you can capture and store.

Connection Percent Utilization Storage Capture Time
1 Gb 25% 48 TB 213 hours
10 Gb 25% 48 TB 19 hours

For example, having a 48 TB appliance monitoring a 25 percent utilized full-duplex gigabit link, you could capture 213 hours (nine days) of traffic. If you upgraded to a full-duplex 10 Gb network link being utilized at 25 percent, this would greatly reduce the amount of time your 48 TB appliance could capture to 19 hours. To avoid compromising your troubleshooting capabilities, you would want to increase storage capacity.

How do you ensure you’re not missing critical network events? Use the GigaStor Calculator to determine your storage needs. Based upon the number of interfaces and utilization, estimate how many days and hours of data your GigaStor will hold.

Network Instruments Article

Wind Mobile’s Vimpelcom takeover agreed; speculation rife on consolidation

Orascom Telecom Holding – a majority owned unit of Vimpelcom – and Wind Mobile’s founder, chairman and CEO, Anthony Lacavera, have entered into an agreement to transfer Mr Lacavera’s controlling shares of the Canadian cellco to Orascom. Upon closing the deal, the Vimpelcom division will own an indirect 99.3% stake in Globalive Wireless Management Corp (trading as Wind Mobile), and Lacavera will step down from his current posts to continue in a non-operational capacity as Wind Mobile’s honorary chair, while retaining a small economic stake in the company. Under the terms of the agreement, upon obtaining certain necessary regulatory approvals, Orascom will indirectly acquire all of the Globalive Wireless Management Corp shares currently held by AAL Corp, a holding company that is majority owned by Anthony Lacavera. As part of the consideration to be paid to AAL Corp (which includes cash consideration and a continuing economic participation in Wind Mobile for AAL Corp), the Globalive group’s fixed line assets (including the Globalive name and trademark) will be transferred to AAL Corp.

Completion of the transactions is subject to satisfaction of certain conditions, including Canadian regulatory approval of the conversion of Orascom’s non-voting shares into voting shares, which would result in Orascom holding an indirect 65.1% voting and economic interest in Globalive Wireless Management Corp immediately before completion of the transactions with AAL Corp. Orascom currently holds an indirect 32% voting interest and 65.1% economic interest in Wind Mobile. AAL Corp currently holds an indirect 66.7% voting interest and 34.3% economic interest. Orascom is acting on recent law changes in Canada allowing 100% foreign ownership in telcos with a revenue market share of 10% or less. Vimpelcom – owned by Russian and other investors including Norway’s Telenor – revealed in October 2012 that Egypt-based Orascom Telecom Holding was changing its name to Global Telecom Holding, although the title change is yet to take effect.

Mr Lacavera will retain the Canadian fixed line businesses of the Globalive group which include Yak Communications, One Connect, Canopco and Globalive Carrier Services. In a press release on the Globalive Holdings website, the private group also said that it will launch a new venture called Globalive Capital in 2013 to focus on strategic investments in technology and telecoms companies.

Launched in December 2009, Wind Mobile’s commercial 3G mobile network covers Southern Ontario (including Toronto), Ottawa, Vancouver, Calgary and Edmonton, and currently serves approximately 600,000 subscribers. Industry sources quoted by Canadian newspaper The Globe & Mail speculate that a move by Vimpelcom to sell Wind Mobile to one of Canada’s three incumbent nationwide mobile operators is likely, as the Amsterdam-based group looks to cut its losses. Sources added that merger talks with a rival second-tier operator Mobilicity have recently gone cold, while Rogers is mentioned as the most likely buyer for Wind ahead of nationwide peers Bell or Telus. However, an immediate takeover is hampered by the legal ban on Rogers, Bell or Telus acquiring the frequency licences of market newcomers before 2014. Last week Rogers announced an agreement to purchase the 2100MHz spectrum of cableco Shaw, to be implemented in 2014.

Thanks to TeleGeography for this Article