Europe's largest computer consultancy, Capgemini, forecast growth in revenue and profitability this year and pledged to revive its loss-making US business, driving its shares up by nearly 8 per cent.
The bullish outlook came yesterday after Capgemini, hit by restructuring charges, posted a larger-than-expected net loss of €359 million for 2004 - compared with the €223 million forecast by analysts - that meant no dividend for investors for the third consecutive year.
Operating profit, meanwhile, fell to €58 million from €155 million in 2003. However, operating income fell by less than analysts feared as sales and profitability rose amid stronger demand for IT services in the second half, driven by its European operation.
The company's North American operation showed a loss of €32 million in the second half of 2004, the same amount as in the first, with the costs of large contracts like TXU weighing.
Incoming chief operating officer Mr Pierre Danon will oversee the US recovery plan, which will refocus on a limited number of accounts; make more selective investments; reduce its office locations to 12 from 44; and outsource more services to Poland and India.
"We are on a new profitability trend. It's something that will be continued in 2005," CFO Mr Nicolas Dufourcq told analysts.
Capgemini said its US operation would break even in the second half of 2005, while favourable market conditions paved the way for a "significant" improvement in profitability for its European operation.
The company said it expected to increase revenue by around 10 per cent in 2005, and to propel its operating margin upwards, to a level in line with consensus estimates of 3 to 3.2 per cent, from the 0.9 per cent achieved in 2004.
Chief executive Mr Paul Hermelin said: "We are shooting for a margin of 3 per cent or better if the US restructuring can be accelerated."
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)