Computer Task Group’s third-quarter profits tumbled by 24 percent as its health care solutions business continues to struggle with lower spending by hospitals, but the earnings still managed to beat the expectations of Wall Street analysts.
CTG, which is reshaping its operations under new CEO Cliff Bleustein, said it earned $2.1 million, or 13 cents per share, during the quarter, down from $2.7 million, or 17 cents per share, a year earlier. Analysts expected the company to earn 11 cents per share.
CTG’s revenues fell by 4 percent, to $93.1 million, from $96.8 million, mainly because of a 15 percent drop in sales from its health care solutions business. Sales from CTG’s staffing business, which accounts for more than two-thirds of its overall revenues, grew by 2 percent, to $63 million, but those sales also were hurt because of cutbacks by Lenovo, one of its biggest customers.
Bleustein said the company expects to face “continued head winds” for the next few quarters as it reshapes its business and its customers face a challenging economy. The company said it expects profits for all of 2015 of between 35 and 37 cents per share, compared with analyst expectations of 35 cents, but down by 44 percent, from 64 cents per share, a year ago.
Under Bleustein, CTG is beefing up recruiting for its staffing business and pushing to win new customers across a wider swath of industries, as well as at additional divisions serving its existing customers.
With CTG’s health care solutions business still grappling with the reluctance of hospitals to invest in costly electronics medical records systems, the company is reshaping that business to focus more on advisory and technology services, as well as opportunities to sell those services across its customer base.
“I believe we have identified a realistic path for repositioning CTG,” Bleustein said during a conference call Tuesday.
CTG’s shares, which have lost 26 percent of their value this year, closed at $7.06 on Monday, an increase of 9 cents, or 1.27 percent.