Cognizant Q2 net profit up 19 pct, raises full-year revenue guidance

Aug 06 2013, 19:53 IST
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Company expects 2013 earnings of at least $3.96 per share on revenue growth of at least 19% to $8.74 bn. Company expects 2013 earnings of at least $3.96 per share on revenue growth of at least 19% to $8.74 bn.
SummaryBuoyed by its performance, Cognizant raised its revenue guidance to $8.74 bn.

IT services firm Cognizant today posted a better-than-expected 19 per cent increase in its net profit at USD 300.4 million in the second quarter this year helped by broad-based growth across geographies and segments.

The US-based firm had reported a net profit of USD 251.9 million in the year-ago period, it said in a release.

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Buoyed by its performance, Cognizant raised its revenue guidance for 2013 to USD 8.74 billion, up at least 19 per cent compared to 2012. It follows January-December as fiscal year.

Its revenues for the April-June quarter of 2013 rose by 20 per cent to USD 2.16 billion in second quarter of 2013 against USD 1.79 billion is the same quarter of 2012 beating its own estimate.

For the second quarter of 2013, Cognizant had said earlier it expects revenues to be "at least USD 2.13 billion".

"Continued healthy demand in the second quarter resulted in broad-based growth across our industries, geographies and services, thereby driving significant revenue and EPS outperformance," Cognizant CFO Karen McLoughlin said.

Excluding the USD 0.07 of non-operating foreign exchange loss, which was not included in the guidance, the firm is pleased that it exceeded the non-GAAP EPS guidance for the quarter by USD 0.08, McLoughlin added.

Analysts said Cognizant earnings beat expectations.

"Cognizant beat revenue and EPS expectations and it guided expectations higher than before - specifically, full year revenue guide is now almost at our much higher than consensus estimate and still includes use of 'at least' to form a lower bound on this estimate,"Citigroup said in a note.

"In addition, strong cash flows during the quarter allowed us to increase our cash and short-term investment balances to approximately USD 2.9 billion," McLoughlin said.

On the revenue outlook, the firm reviewed its guidance upwards for the full 2013 fiscal.

"Fiscal 2013 revenue expected to be at least USD 8.74 billion, up at least 19 per cent compared to 2012," it added.

While presenting the first quarter results, Cognizant had said its expects revenues to grow at 17 per cent to "at least USD 8.6 billion" against 20 per cent growth achieved in 2012.

Earlier, rivals TCS, Infosys, Wipro and HCL technologies reported better-than-expected results signalling a pick-up in demand for Indian IT outsourcing services providers.

"Our 15 year record of revenue and earnings growth is a testament to our long-term strategy of reinvesting in our business to stay relevant to

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