Cognizant Q1 net up 17% on higher demand from Europe

Mumbai: IT services firm Cognizant today posted 16.6 per cent rise in consolidated net profit at $ 284.2 million for January-March 2013 quarter and maintained its outlook of 17 per cent revenue growth this calendar year.

The company’s net profit stood at $243.7 million in the first quarter of 2012, Cognizant said in a statement. The US-based company’s revenues increased 18.1 percent to $2.02 billion in the reported quarter from $1.71 billion in the year-ago period, in line with its guidance of “at least $2 billion”.

[caption id=“attachment_763939” align=“alignleft” width=“380”] Revenue for the quarter rose 18 percent to $2.02 billion. Reuters[/caption]

“Our performance during the first quarter was strong, and we are encouraged by the healthy demand for our broad range of services,” said Francisco D’Souza, Chief Executive Officer.Cognizant continues to make solid progress developing emerging offerings in new markets, new SMAC technologies, and new non-linear solutions and services, he added.

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For the second quarter (April-June) of 2013, Cognizant expects its revenues to be “at least $2.13 billion”. For whole year, Cognizant has maintained its outlook for revenues to grow at 17 per cent to “at least $8.6 billion” against 20 per cent growth achieved in 2012.

Cognizant’s earnings and outlook come at a time when Indian IT firms have painted a mixed picture for the industry.After logging over 22 per cent profit growth in March quarter, TCS expressed the confidence of beating Nasscom estimate of 12-14 per cent industry growth in 2013-14. HCL Tech had posted better-than-expected performance with 72.6 percent jump in quarterly profit in March quarter.

However, Infosys disappointed with around 3 percent profit growth and said FY'14 full-year revenue growth will be in 6-10 percent range, lower than the Nasscom indsutry estimate. Wipro also has come out with a muted June quarter revenue outlook.

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Cognizant follows January-December fiscal. Though it is not listed in India, about 75 per cent of its over 1.6 lakh employees are based in India. The company added about 6,000 people in the quarter, taking headcount to over 1.6 lakh. Cognizant also announced that its Board of Directors approved an expansion of its stock repurchase programme.

The Board of Directors increased the stock repurchase program by $500 million to $1.5 billion and extended the term of the programme to December 31, 2014, the statement said. To date, the company has repurchased $940 million of its shares under this programme, it added.

“Our financial model continues to allow us to deliver solid top-line growth with stable margins, while investing in our next generation of services to spur long-term strength,” Cognizant CFO Karen McLoughlin said. “We have repurchased $74 million worth of shares year-to-date under our stock repurchase program and expanded the program to $1.5 billion, reflecting our ability to generate strong cash flows, confidence in our business, and our commitment to drive shareholder value,” McLoughlin added.

PTI