Capgemini cuts 2024 revenue target again as soft markets hit third-quarter revenue

(Reuters) -French IT consulting group Capgemini on Wednesday cut its 2024 revenue target for the second time this year, after persistent weakness in some of its markets, especially manufacturing, hit third-quarter sales.

The group, which offers services ranging from cloud and AI to business management across a wide range of industries, had forecast a surprise drop in annual revenue in July due to a downturn in the automotive and aerospace sectors.

It now expects sales to fall between 2% and 2.4% at constant exchange rates, compared to its previous forecast of a decline of 0.5% to 1.5%.

Capgemini’s revenue fell 1.6% at constant exchange rates to 5.38 billion euros ($5.82 billion) in the third quarter.

“In a market that remains weak overall, we expect to deliver similar growth in the fourth quarter,” CEO Aiman ​​Ezzat said in the earnings statement, although he added that the company expected headwinds in technology and telecom sector will gradually decline.

“Customer demand continues to be driven by operational efficiency and cost reduction and we are tapping into their growing interest in AI and Gen AI services,” said Ezzat.

($1 = 0.9244 euros)

(Reporting by Leo Marchandon in Gdansk; Editing by Milla Nissi)