MONTREAL -- IT company CGI Group Inc. (GIBa.TO) sees opportunities to profit from promised spending and tax changes by the new Trump administration.
Chief executive George Schindler told analysts Wednesday the Montreal-based company is well-positioned to benefit from expected increases in government spending on defence and intelligence agencies.
While there's uncertainty over spending in U.S. domestic departments such as the Environmental Protection Agency and Health and Human Services, Schindler says CGI no longer has any significant exposure to Obamacare, which is under threat of repeal.
Nearly 14 per cent of the company's revenues in the first quarter came from the U.S. federal government and 27 per cent in the United States as a whole.
CGI was recently awarded a contract from the Department of Homeland Security to provide identification management services for 27 federal agencies.
With 11,000 employees in the United States and six call centres employing American workers, Schindler says the company is less impacted by visa challenges that affect many of its competitors.
The company also sees a promised tax cut from its current rate of 40 per cent to as low as 15 per cent having a big impact on its net profits.
In advance of those promised reductions, CGI says it's seeking acquisitions in the United States.
CGI says it's also optimistic about opportunities in Britain, despite delays of some large contracts caused by uncertainty over the country's withdrawal from the European Union.
The company says its net profit increased 16 per cent in the first quarter despite a dip in revenues caused by currency fluctuations.
It earned $275.7 million or 89 cents per diluted share for the three months ended Dec. 31, compared to $237.7 million or 75 cents per share in the first quarter of 2016.
Excluding one-time items, it earned $277.6 million or 90 cents per diluted share. That compared to $264.9 million or 84 cents per share a year ago.
Revenues slipped slightly to $2.67 billion from $2.68 billion.
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