Leading information technology services provider Cognizant Technology Solutions Corporation (CTSH) reported revenues of $1.37 billion in the first quarter of 2011, up 42.9% year over year and up 4.6% sequentially, in-line with the Zacks Consensus Estimate and management's expectation of at least $1.36 billion.
Net income came in at $208.3 million or 67 cents per diluted share compared to a net income of $151.5 million or 49 cents per share in the year-ago quarter. This easily beat the Zacks Consensus Estimate of 64 cents. Operating margin came in at 19.4%.
Excluding stock-based compensation expenses of $16.1 million, Cognizant posted an operating margin of 20.5%, better than management's targeted range of 19%−20%.
Going forward, management expects revenues of at least $1.45 billion in the second quarter of 2011. EPS is projected at 65 cents. Excluding stock-based compensation expenses, EPS is forecasted at 70 cents.
Cognizant now expects revenues of at least $5.92 billion, up from the previous estimate of $5.79 billion and up 29% year over year. EPS is likely to be at least $2.63, up from the earlier forecast of $2.72. Excluding 19 cents of estimated stock-based compensation expenses, EPS is forecasted at $2.91, up from the previous estimate of $2.85.
Cognizant remains well diversified among key verticals such as financial services, health care & life sciences, retail, manufacturing and logistics, which have helped the company to maintain its top line. Expansion into new geographies along with new processes represents a substantial opportunity for growth.
Cognizant earlier stressed that clients are not just seeking cost efficiencies, but are also stepping up investments in their business platforms and new capabilities to drive growth and innovation. The company competes with Infosys Technologies Ltd. (INFY) and Wipro Limited (WIT) in this space.
The results did not impress investors as the stock was down 8.56% in early trading.
COGNIZANT TECH (CTSH): Free Stock Analysis Report
INFOSYS TEC-ADR (INFY): Free Stock Analysis Report
Be the first to comment