Cognizant Technologies on Friday reported its first quarter revenue at $3.20 billion, up 10% from $2.91 billion in the first quarter of 2015. This is the IT major’s slowest quarterly revenue growth in 14 years as its clients in the financial and healthcare services held back on spending.
The net income was $441.2 million, or $0.72 per diluted share, compared to $382.9 million, or $0.62 per diluted share, in the first quarter of 2015. Shares of the company, which also forecast second quarter earnings below estimates, fell about 1 per cent in premarket trading.
Like its Indian rivals Tata Consultancy Services and Infosys, Cognizant also gets the largest chunk of its revenue from financial services clients.
The IT major expects the second quarter revenue to be in the range of $3.34 billion to $3.40 billion. Revenue for the fiscal is expected to be in the range of $13.65 billion to $14.0 billion.
“Based on first quarter results and our visibility on deals ramping up throughout the year, we have tightened our 2016 revenue guidance range to $13.65-$14.0 billion, representing approximately 10-13% growth year-over-year,” said Karen McLoughlin, CFO of Cognizant.
Commenting on the results, Francisco D’Souza, CEO of Cognizant said, “Overall, our first quarter results were in line with our expectations and guidance. Client demand for our digital expertise, services and technologies remains strong,” “We continue to see positive returns from our extensive strategic investment in disruptive technologies, new digital business models and best-in-class delivery capabilities. We believe our strong fundamentals have positioned us well to be the transformation partner of choice for our clients,” he added.
Gordon Coburn, President said, “As we move into the second quarter, we are quite pleased with our momentum with new and existing clients, which we expect to drive sequential revenue growth in the second quarter of $140 to $200 million. To support this expected growth, we significantly accelerated hiring during the first quarter and increased our global headcount by 11,300 employees.”
(With inputs from Reuters)