Indian software services provider Wipro Ltd. (WIT: Quote) reported Monday a profit for the first quarter that increased 18 percent from last year as client additions helped by revenue growth amid a tough environment for technology spend and adverse currency effects.
In dollar terms, earnings per share came in line with analysts' expectations, while quarterly revenues missed their estimates. Further, Wipro has projected IT Services revenues in the second quarter to remain nearly flat sequentially.
"We have seen high levels of volatility in currencies globally. We have improved profitability, while continuing to invest for growth," CFO Suresh Senapaty said in a statement.
The Bangalore, India-based company reported net income attributable to equity holders of 15.80 billion rupees or 6.43 rupees per share and in dollar terms $284 million or $0.12 per share. This was up from last year's 13.35 billion rupees or 5.44 rupees per share. Wipro reports results on the basis of International Financial Reporting Standards.
Excluding the impact of accelerated amortization of stock based compensation, adjusted net income attributable to equity holders totaled 15.74 billion rupees or $283 million.
On average, six analysts polled by Thomson Reuters expected the company to earn $0.12 per share for the first quarter. Analysts' estimates typically exclude special items.
In the preceding fourth quarter, Wipro's net income attributable to equity holders was $291 million or $0.12 per share.
Total revenues for the first quarter grew 24 percent to 106.53 billion rupees or $1.92 billion from 85.64 billion rupees in the same quarter last year, but were lower than the previous quarter's $1.94 billion. Eight Wall Street analysts had a consensus revenue estimate of $2.00 billion for the quarter.
IT Services revenue, in rupee terms, was 83.14 billion rupees, a year-over-year increase of 30 percent. In dollar terms, revenues grew 8 percent to $1.52 billion, and adjusted constant currency IT Services Revenue were $154 billion, in line with the company's guidance range of $1.52 billion to $1.55 billion.
IT Products revenues declined 5 percent, while consumer care and lighting revenues increased 30 percent from a year ago.
Wipro said its IT Services added 37 new clients in the quarter and also reported net addition of 2,532 employees in IT Services.
"We have delivered revenues in line with our guidance in a volatile environment. We will continue to build differentiation and invest in technology driven business transformations for our customers as well as rewarding our talent," IT Business CEO T.K. Kurian noted.
Looking ahead to the second quarter, the company expects revenues from IT Services business to be in the range of $1.52 billion to $1.55 billion.
Wipro's Bangalore-based peer, Infosys Technologies Ltd. (INFY: Quote) reported on July 12 an 8 percent increase in profit for the first quarter to $416 million or $0.73 per ADS, helped by a near 5 percent revenue growth to $1.75 billion from last year. The group added 51 clients during the quarter, and net employee addition was 1,157.
Separately, Wipro said it has won a large multi-year contract with Royal Philips Electronics as their Global Prime Partner in its Transformational program, towards enabling enhanced business growth and profitability.
WIT closed Monday's regular trading session at $7.87, down $0.26 or 3.20% on a volume of 0.46 million shares.
On Tuesday, Wipro is currently trading on the Bombay Stock Exchange at 343.85 rupees, down 12.60 rupees or 3.53% from the previous close.
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by RTT Staff Writer
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