The ratings on France-based Cap Gemini S.A. reflect Standard&Poor's Ratings Services opinion of the company's broad and diversified capabilities in IT services, conservative financial policies, solid offshore base, and adequate cost control. Partially offsetting these factors, in our view, is the cyclical and intensely competitive nature of the IT services industry, which results in low margins and frequent capacity adjustment costs. Cap Gemini's revenues fell 6.9% year on year in the first quarter of 2010, with organic growth down 7.8% during the period. Trading conditions for IT services remained difficult in the quarter, but the company indicated that it was seeing some encouraging signs of stabilization and a slight pick up in activity at its consulting business and
