Computer Task Group Inc., or CTG, (NASDAQ: CTG) reported revenue fell 7.9% year over year in the first quarter, though gross margin and net income improved.
The Amherst, New York-headquartered IT solutions and staffing provider said revenue fell in its Europe IT solutions and services segment as well as in its “non-strategic technology services” segment that includes staffing. The decline in non-strategic technology services came as the company cut back on lower-margin nonstrategic business, it noted.
Revenue rose in CTG’s North America IT solutions and services business line with the segment gaining new customers.
| (US$ thousands) | Q1 2022 | Q1 2021 | % change |
| Revenue | $89,417 | $97,129 | -7.9% |
| Gross profit | $20,595 | $20,767 | -0.8% |
| Gross margin | 23.0% | 21.4% | |
| Net income | $2,240 | $1,508 | 48.5% |
European revenue was negatively impacted by $3.1 million because of foreign currency exchange rates, a reduction in 20 resources at one client and macroeconomic headwinds in the European Union, according to the company.
Revenue by segment
| (US$ thousands) | Q1 2022 | Q1 2021 | % change |
| North America IT solutions and services | $20,435 | $18,454 | 10.7% |
| Europe IT solutions and services | $42,478 | $46,007 | -7.7% |
| Non-strategic technology services | $26,504 | $32,668 | -18.9% |
Guidance
CTG lowered its full-year 2022 revenue guidance by $15 million because of foreign currency exchange concerns and now expects full-year revenue to range from $260 million to $380 million.
“Macroeconomic conditions in the European Union have significantly decreased the value of the euro, and we do not see this reversing in the short term,” CFO John Laubacker said.
Share price and market cap
Shares in CTG were up 0.81% to $8.71 as of 12:03 p.m. Eastern time; they were 16.25% below their 52-week high, according to FT.com. The company had a market cap of $132.6 million.