L French IT company Capgemini, whose stock dropped more than 9%, reported an unexpected drop in annual revenues, attributing it to a slump in the aerospace and automotive industries.
The French IT company Capgemini (CAPP.PA), whose shares fell more than 9%, predicted a surprising decline in yearly sales on Friday, blaming a downturn in the automotive and aerospace sectors. Capgemini’s shares dropped 9.4% by 07:28 GMT, hitting the lowest point on the CAC40 index (.FCHI). The Paris-based company stated that it now anticipates a 0.5% to 1.5% decline in organic sales in 2024, instead of the 0-3% increase that was formerly predicted.
The CEO, Aiman Ezzat, said in a statement that “the recent deterioration of the outlook in the automotive and aerospace sectors and the slower recovery in financial services will affect the slope of recovery in the second half.” Although Ezzat pointed out that this would only have an immediate impact on growth, he informed analysts that supply chain issues have slowed down the aerospace sector. Compared to the 7.1% decline in revenue during the first three months of 2024, Capgemini reported a 3.7% decline in North American revenue for the second quarter. North America’s revenue fell 5.4% in the first half of the year.
According to Ezzat, between the first and second quarters, North America had the best comeback. With 28% of the group’s total sales in the first half of the year, the market was the second largest. It hurt Capgemini’s performance in the midst of the tech industry’s collapse last year as well. At the end of June, the business had 336,900 total employees, 4% fewer than a year earlier. For the first time since 2009, Capgemini has reduced hiring since 2023 and ended the year with 5% fewer resources than it had at the beginning.
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