IT services provider Cognizant Technology Solutions Corp reported a quarterly profit that edged past analysts' estimates on continued demand from its healthcare and financial clients.
IT services major Cognizant today posted a 26 per cent increase in net profit at USD 557 million for the quarter ended March 31, 2017. Cognizant’s net profit stood at USD 441 million in the first quarter of 2016. The US-based firm saw its revenue grow 10.7 per cent to USD 3.55 billion in the reported quarter from USD 3.2 billion in the year-ago period, meeting its guidance range of USD 3.51-3.55 billion. Cognizant has a large part of its 2.6 lakh-strong workforce in India.
The company has maintained its revenue forecast for the fiscal 2017 to be between USD 14.56-14.84 billion. For the April-June 2017 quarter, it expects its revenues to be between USD 3.63 and 3.68 billion. “We delivered solid results in the first quarter and continued to build our digital solutions portfolio, expand our skills, and enhance our engagement with clients,” Cognizant CEO Francisco D’Souza said.
He added that the company is making good progress in accelerating its shift to digital services and solutions, positioning it well to achieve both revenue and margin targets for this year. Cognizant said it is “realigning” its business to accelerate shift to high-value digital transformation work, while continuing to re-assess less profitable opportunities. As part of the process, the company plans to improve utilisation and optimise workforce to better align with client demand.
Cognizant expects to incur a majority of the total costs related to this realignment programme in 2017. “This realignment is part of our plan to improve our non-GAAP operating margin to 22 per cent in calendar year 2019 while continuing to drive revenue growth,” it said. On its accelerated share repurchase programme, Cognizant said the ASR purchase periods are scheduled to end during or prior to the third quarter of 2017.