The rating on France-based Cap Gemini S.A. reflects the group's: Leading positions in the global IT services and consulting markets, Well-balanced presence between the large EU and U.S. markets, and Conservative financial profile. The rating also reflects the industry's favorable long-term prospects. Nevertheless, it acknowledges Cap Gemini's significant exposure to projects-and-consulting revenues, despite recent rebalancing efforts in favor of more predictable contract revenues (mostly IT outsourcing). The trend toward globalized technology services should benefit large players with a worldwide scale and a full range of expertise. In Cap Gemini's case, however, the challenging integration of Ernst&Young's consulting activities still requires keen management oversight in a context of continued weak demand--particularly from the telecoms, media, financial services, manufacturing, high-tech,
