Computer Task Group's second-quarter profits tumbled by 66 percent as the Buffalo-based information technology company's sales fell by almost 10 percent after one of its big staffing clients cut back.
CTG's profits fell to $434,000, or 3 cents per share, from $1.3 million, or 8 cents per share, a year earlier. The earnings were weaker than the 5 cents per share that analysts were expecting. Sales dropped to $75.5 million from $83.5 million a year ago.
CTG executives blamed the drop in revenues on a combination of less business and delayed purchases at one of its big staffing clients, which the company did not identify.
CTG, under new CEO Bud Crumlish, has launched a three-year plan to revamp the company's operations and restore revenue growth. Under that plan, CTG has revamped its sales staff and is emphasizing cross-selling opportunities among its clients. CTG also is trying to diversify its client base, which has long been highly concentrated on big customers, such as IBM Corp.
Crumlish, in a conference call Tuesday, said CTG's pipeline of potential business is bigger than it has been in years, although he also cautioned that the company still must win that business and make it profitable.
"I am very optimistic about the progress we are making," Crumlish said. "We've got a really strong pipeline that I haven't seen in years."
CTG said it expects revenue to range of $75 million and $77 million during the current quarter, down from $78 million a year ago. It expects to earn 4 cents to 6 cents per share.
For all of 2017, CTG said it expects to earn 22 cents to 26 cents per share, compared with 23 cents a year ago. It forecast that revenues would range from $305 million to $315 million, down from $325 million in 2016.