The NYSE-listed outsourcing services provider, Genpact Ltd, on Tuesday reported a 13.8% increase in its net profit at $31.81 million for the second quarter ending June 2009 against the same period last year. However, on a sequential basis, the company’s net profit was marginally down compared to $31.87 million reported during the first quarter. The company follows the calendar year as its financial year.
During the quarter, Genpact’s revenues stood at $272.9 million, up 8% compared to the same period last year and 2.7% sequentially. Diluted earnings per common share were $0.14, up from $0.11 per share in the second quarter of 2008. The company has also revised its guidance downward in the range of 6-9% growth in revenues for 2009 against 2008 from 10-15% which was earlier projected.
Pramod Bhasin, Genpact’s president and CEO, said, “In light of the environment of continuing delays and uncertainty, and based on the trends in the second quarter that we believe are likely to continue, we feel it is appropriate at this time to revise our annual guidance for 2009”.
However, the company has increased its adjusted operating margin guidance to a range of 17-17.5% from 16-17% as it tries to manage its costs better. “Our global client growth engine is healthy and robust, our relationship with GE is strong and deep and our profitability is expanding, even in a tough economy,” added Bhasin.
The company’s net income margin for the quarter was at 10.9%, up from 9.8% in the same period last year but down from 11.3% in the first quarter ending March 2009. Revenues from GE, which contributes 40% of Genpact’s total turnover, declined by 7% while revenues from clients other than GE, grew by 27% y-o-y.
Genpact has also acquired South Africa-based shared services centre of South African Breweries Ltd (SAB) in Johannesburg. The partnership will include the transition of all employees of the centre to Genpact, which sees SA as a strategic location considering its favourable economic environment.