Cognizant's April-June net jumps 21%; meets revenue guidance

Software services major Cognizant Technology Solutions today posted 21 per cent jump in net profit at $251.9 million for the quarter ended June 30, 2012, on the back of strong demand for outsourcing services.

The company's net profit stood at $208 million in the April-June 2011 quarter, Cognizant said in a statement.

"Clients continue to turn to Cognizant to help reinvent their business models in the face of secular industry changes, evolving demographics, and a new stack of social, mobile, analytics, and cloud technologies," Cognizant CEO Francisco D'Souza said.

The company is well-positioned to capitalise on these opportunities, he added.

Cognizant's revenues grew 20.9 per cent in the quarter under review to $1.79 billion from $1.48 billion, meeting its guidance for the second quarter which it expected would be "at least $1.79 billion".

Its April-June revenues are also higher than Infosys' $1.75 billion in the same quarter.

Cognizant, the third largest software services firm in India after Tata Consultancy Services and Infosys, follows a January-December fiscal. Though it is not listed in India, 75 per cent of its over 1.45 lakh employees are based in India and is often referred to as an Indian entity.

Last year, Cognizant for the first time toppled Wipro from its spot as the third largest software exporter in India.

For the September quarter, Cognizant anticipates its revenues to be at least $1.875 billion, while for the 2012, it maintained its outlook for revenue to be at least $7.34 billion (at least 20 per cent compared to 2011).

In contrast, Wipro expects its revenues from its IT services business to be in the range of $1.520 billion to $1.550 billion in the July-September 2012 quarter.

With a bullish annual revenue outlook, Cognizant may come at par or even surpass country's second largest software firm Infosys.

Infosys, which has slashed revenue outlook for the year to five per cent growth given the uncertainty in the environment to be at least $7.343 billion.

"Our reaffirmed full-year revenue guidance includes absorbing more than $20 million of negative currency impacts during quarters two through four as a result of currency movements since we last provided guidance in early May," Cognizant Chief Financial Officer Karen McLoughlin said.

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