Cognizant profit rises 23%; forecasts Q2 revenue at $2.5b

IT services major Cognizant today posted a 22.8 per cent jump in net profit to $348.9 million in the January-March quarter, driven by strong momentum in the European region and broad-based growth across businesses.

The New Jersey-headquartered firm had registered a profit of $284.2 million in the first quarter of 2013. Revenue in the first quarter of 2014 climbed 19.9 per cent to $2.42 billion, Cognizant said in a statement.

"Our broad set of capabilities and our compelling value proposition enable Cognizant to help clients simultaneously run better and run different, by not only driving efficiency in their operations, but also helping them to re-imagine and re-design their business models," Cognizant Chief Executive Officer Francisco D'Souza said.

The company expects revenue to increase to between $2.5 billion and $2.53 billion in the second quarter, compared with $2.16 billion a year earlier. For 2014, revenue is forecast to be at least $10.3 billion, up 16.5 per cent from 2013.

"We remain confident in the overall demand environment and in our ability to deliver our previously stated revenue guidance of at least $10.3 billion for 2014," Cognizant President Gordon Coburn said.

As the impact of digital technologies increasingly becomes a CEO-level agenda item, Cognizant is well-positioned to capitalise on this trend, he added.

Business in the UK region, which accounted for 11.5 per cent of the quarter's revenue, grew 28.2 per cent year-on-year to more than $1 billion.

Overall, the European region's business grew 35 per cent y-o-y, accounting for 19.4 per cent of the quarter's revenue.

The North American market grew 16.1 per cent (75.8 per cent of revenue), while the rest of the world saw revenue rising 28.4 per cent.

Cognizant added about 7,200 people (net), taking its global head count to about 178,600 employees as of March 31.

"Our continued focus on operational excellence and our strong ramp-up in hiring during the quarter positions us to effectively service the healthy demand environment that we anticipate this year," Cognizant Chief Financial Officer Karen McLoughlin said.

Financial services saw a 19.7 per cent growth from a year ago, while manufacturing, retail & logistics and healthcare grew over 20 per cent.

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