Information technology company iGATE Corp. (IGTE: Quote), operating under the brand name iGATE Patni, reported Friday a higher first-quarter profit, reflecting a surge in revenues, despite a slight decline in margins. Adjusted earnings, excluding items, surpassed analysts' expectations, while revenues came below their view.
Phaneesh Murthy, CEO of the company said, "The long tail rationalization of our customers that we undertook yielded us higher profits but dipped revenues and the delays in project kick-offs resulted in lesser revenue growth. We expect our revenue growth to be back on track over the next couple of quarters creating a back loaded year."
iGATE Patni added seven new customers during the quarter.
After acquiring a majority stake in Patni Computer Systems Ltd., iGATE accepted delisting offer of Patni, enabling it to proceed with delisting from the Indian stock exchanges at Rs. 520/- per share. It was in January 2011 that iGATE agreed to acquire an 83 percent stake in IT services and BPO company Patni Computer Systems for $1.22 billion.
Sujit Sircar, CFO stated, "The successful delisting of Patni will be an important step towards our vision of 'one company' and will set us up well for a possible downstream merger while also reducing costs of Compliance and Governance."
In the first quarter, net income attributable to iGATE shareholders increased to $16.98 million from $15.2 million in the previous year. On a per share basis, earnings were $0.22, unchanged from last year.
Adjusted earnings increased to $0.38 from $0.23 per share reported a year earlier. On average, six analysts polled by Thomson Reuters expected the company to earn $0.32 per share. Analysts' estimates typically exclude special items.
Revenues for the quarter surged 247.4 percent to $263.27 million from $75.8 million in the same quarter last year, but was below analysts' estimate of $270.27 million.
Gross margin was 40.2 percent, compared to 40.9 percent in the preceding year.
IGTE is currently trading at $18.06, up $0.89 or 5.16 percent, on a volume of 38 thousand shares.
by RTT Staff Writer
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