Revenue fell 8.6% at CTG (NASDAQ: CTG) in the third quarter. The Buffalo, New York-based IT staffing and solutions firm reported the decrease was caused by the economic damage from Covid-19 as well as the company’s transition away from lower-margin staffing revenue.
“While client demand continued to be impacted by the Covid-19 pandemic, our team demonstrated consistent progress on our strategic initiatives involving digital solutions,” President and CEO Filip Gydé said.
Gydé also noted the company landed several large contracts in the third quarter, including multi-million dollar deals to provide service desk solutions for two West Coast hospitals.
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Revenue | $88,648 | $97,024 | -8.6% |
| Gross profit | $19,547 | $18,742 | 4.3% |
| Gross margin | 22.1% | 19.3% | |
| Net income | $2,831 | $879 | 222.1% |
Net income rose sharply. The company cited a tax benefit and a nontaxable life insurance gain of $574,000.
Guidance
“Given the ongoing impact of the Covid-19 pandemic on CTG’s end markets, the company will continue to not provide guidance for the fourth quarter and full year 2020,” CFO John Laubacker said. “We are, however, very encouraged by the success of our solutions initiatives, which resulted in a significant increase in the company’s gross profit margins in the third quarter of 2020.”
Share price and market cap
Shares in CTG were up 9.16% to $5.48 as of 11:52 a.m. Eastern time, but they were 15.43% below their 52-week high. The company had a market cap of $76.2 million.