Europe's largest computer services firm Cap Gemini Ernst & Young warned today that sales would decline sharply in the current quarter and that growth and profitability would not improve before mid-2002.
Cap Gemini shares slid as much as six per cent before slightly recovering as the group said first quarter sales would fall by more than 10 per cent after a weak fourth quarter and amid persistent pressure on prices.
The company shed 20 jobs from its 170-strong Irish staff in December following the dramatic global downturn.
The French company posted 2001 operating profit of €423 million, slightly above analyst expectations, but 40 per cent below €703 million in 2000 on a reported basis.
Cap Gemini was hit hard last year as the September 11th attacks exacerbated a slide in technology spending, especially in the United States where it makes 35 per cent of its sales since acquiring consultant Ernst & Young.
The group's objective is to recover growth and make significant improvement in operating margin as quickly as possible, Cap Gemini said in a statement.
Cap Gemini shares were down 2.02 per cent to €75.05 this afternoon, extending a decline of 2.4 per cent yesterday as the forecast disappointed those who craved reassurance the worst was now over for the group.