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Cognizant Q1 Profit Climbs; Cuts 2012 View; To Buyback Shares

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5/7/2012 6:16 AM ET

Cognizant Technology Solutions Corp. (CTSH: Quote) posted higher first-quarter GAAP net income of $243.65 million, or $0.79 per share, compared with last year's $208.33 million, or $0.67 per share. Excluding stock-based compensation expense, non-GAAP earnings per share advanced to $0.86 from $0.71 a year earlier. On average, 24 analysts polled by Thomson Reuters expected earnings per share of $0.79 for the quarter. Analysts' estimates typically exclude one-time items.

Revenue totaled $1.71 billion, up 24.8% from $1.37 billion in the year-ago quarter. Analysts estimated revenues of $1.71 billion for the quarter.

Cognizant's Chief Executive stated, "Due to a slower than anticipated acceleration in demand as we entered the second quarter, we are adopting a more conservative stance for the remainder of the year and revising our guidance to at least 20% revenue growth for 2012."

Looking forward to the second quarter of 2012, earnings per share are estimated to be $0.80 on a GAAP basis and $0.87 on a non-GAAP basis, excluding estimated stock-based compensation expense, with revenue anticipated to be at least $1.79 billion. Analysts project earnings of $0.83 per share on $1.84 billion revenue for the second quarter.

For 2012, Cognizant now sees earnings per share to be at least $3.36 on a GAAP basis, and $3.62 on a non-GAAP basis, as well as revenue now expected to be at least $7.34 billion. Analysts estimate earnings per share of $3.45 and revenue of $7.54 billion for the full year. Earlier, the company forecasted earnings per share of at least $3.43 on a GAAP basis, and $3.69 on a non-GAAP basis, with 2012 revenue anticipated to be at least $7.53 billion.

Further, the company's board has authorized the expansion of its existing share repurchase program by $400 million, bringing the total authorization under the current repurchase program to $1 billion. To date, $423 million of shares have been bought back in this program. In addition, the board has extended the expiration date for the repurchase program to December 31, 2013.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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