Computer Task Group (NASDAQ: CTG), the Buffalo, New York-based IT solutions and staffing provider, reported revenue fell 17.2% year over year in the third quarter to $75.0 million, but gross margin improved.
The company reported revenue was down by approximately just 1% in the third quarter when excluding the $5.7 million negative impact of foreign currency exchange rates and the disengagement from $8.8 million on non-strategic staffing business in the quarter. CTG also noted the third quarter of last year benefited from the initial ramp-up of a major engagement in North America.
“We continue to be impacted by a range of macroeconomic headwinds as well as business-specific challenges,” CFO John Laubacker said. “These include the foreign currency translation impacts resulting from the significantly devalued euro in the first three quarters of 2022. Additionally, the recent increase in the competition for resources in Europe is creating labor constraints in meeting client demand. Finally, the macroeconomic climate in both North America and Europe has slowed our clients’ decision-making process for IT solutions and services.”
Laubacker continued, “As we mentioned in our first quarter release, we expected quarterly performance at the outset of 2022 to be uneven due to engagement timing, and we now expect that to continue for the rest of the year.”
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Guidance
CTG reported it now forecasts revenue of between $320 million and $330 million for the full year. That includes a reduction of approximately $30 million from the prior year as a result of intentional disengagement from its lowest margin business in its non-strategic technology services segment, $20 million from foreign currency exchange impacts and a significant expected reduction in fourth quarter revenue compared to the prior year due to the completion of a large project in 2021. CTG’s previous guidance had called for full-year revenue of between $330 million and $350 million.
Share price and market cap
Shares in CTG were down 3.56% to $7.61 as of 1:56 p.m. Eastern time; they were 18.52% above their 52-week low, according to FT.com. The company had a market cap of $119.6 million.