Computer Task Group, which already was forecasting a weak second quarter, said Tuesday that business was even slower than it expected this spring.
The Buffalo-based information technology company warned that its profits would be about 9 percent lower than it forecast three months ago, mainly because of rising medical costs stemming from significantly higher claims in its self-insured medical plan for its employees. Without the increase in claims, which CTG said “may be an anomoly,” the company said its earnings would have met its profit target.
But CTG also said its revenues during the spring quarter were weaker that it forecast in April, mainly because the company renegotiated some rates downward in its information technology staffing business.
CTG’s stock fell 39 cents Tuesday, or nearly 3 percent, to $15.01.
CTG, which plans to release its second-quarter earnings next Tuesday, said it now expects to earn 20 cents per share, down from 24 cents per share a year ago and less than the 22 cents per share it had forecast.
The company said its sales would be about $100 million during the second quarter, down roughly 7 percent from $107.1 million a year ago and less than the $102 million that it had forecast in April.