The Cognizant Technology Solutions Corp stood by its full year revenue forecast at a time when its Indian gape have been painting a desolate picture for the rest of the year on restricting global outsourcing spending. On the Nasdaq, the company’s shares rose as much as 13 percent to $65.48. New Jersey-based, Teaneck most of whose employees are in India has been gaining ground over Infosys Ltd and Wipro Ltd as it has traditionally worked with relatively lower margins helping it win more contracts.
Morningstart analyst Swami Shanmugasundaram stated that Cognizant reiterating its guidance of at least 20% growth in this environment shows that it’s in a various league compared to the likes of Infosys and Wipro. For the first time. its quarterly revenue topped Infosys as the bellwether of India’s showpiece $100 billion outsourcing sector faces diminishing hopes of a revival in demand. The Cognizant told the Reuters that six new strategic customers in the quarter includin g Philips Electronics NV, its president Gordon Coburn. In annual revenue, the company defines strategic customers as those who have the potential to bring in at least $5 million to more than $50 million a year.
Coburn stated on a conference call, the cognizant is seeing an upward shift pipeline as clients look ways to run their business more efficiently and a shift to larger end to end outsourcing deals from discretionary projects. In the month of June, the company entered into a $330 million deal with the US unit of Dutch insurer ING Groep NV to expand the business process management contract between the two.
The Chief Financial Officer Karen McLoughlin said on a conference call that the majority of their growth for the remainder of the year 2012 will come from the ramp-up of clients that we won over the past months and years., including recent transformational engagements like ING US, Philips and others.
The Cognizant raised its profit forecast but reiterated its revenue outlook for the year. In the second quarter, Coburn stated the raised profit outlook is mainly a result of its share repurchase plan. The cognizant expects earnings for the year to be at least $3.38 per share up from its previous forecast of at least $3.36 per share, it reaffirmed its revenue forecast of at least $7.34 billion. Coburn said that on a constant dollar basis since they last gave an outlook, they took their outlook up by over $20 million. They’ve absorbed over $20 million of negative currency impact for the full year.
Base to Thomson Reuters, analyst on average were expecting full-year earnings of $3.37 per share on revenue of $7.34 billion.The cognizant expects that its adjusted operating margin to remain in the range of 19 percent for the rest of the year. For the June quarter from 19.8 percent year earlier, operating margins rose to 20 percent.
In 1994, the company founded as captive unit of Dun and Bradstreet in India stated that net income rose to $251.9 million or 82 cents per share for the second quarter from $208 million or 67 cents per share a year earlier. cognizants shares have fallen about 20% since May 7 when the company lowered its full-year forecast for the first time in nearly four years.
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http://profit.ndtv.com/news/market/article-cognizant-quarterly-revenue-tops-infosys-shares-jump-13-308914
