Indian software exporter Infosys Technologies Ltd (INFY, 500209, INFOSYSTCH) Friday lifted its revenue forecast for the fiscal despite a 5 percent decline in profit for the third quarter. The company's profit forecast for the year remains unchanged. The stock is gaining over 13 percent on the Bombay Stock Exchange.
S. D. Shibulal, CEO, said, "We have done well in this quarter despite an uncertain environment. We continue to gain confidence from a strong pipeline of large deals. However, the broader economic environment remains difficult. Even so, we remain cautiously optimistic about the January-March quarter."
For the fiscal ending March 31, the company still expects Earnings per American Depositary Share or ADS of at least $2.97.
The company now expects revenues to be at least $7.450 billion for the year, which includes $104 million from Lodestone Holding AG, a Switzerland-based management consultancy, acquired during the third quarter.
The company's previous forecast was for earnings of $2.97 per share on revenues of at least $7.343 billion.
On average, 16 analysts polled by Thomson Reuters expect earnings of $2.95 per share for the year. Analysts' estimates typically exclude special items. Wall Street expects full year revenues of $7.32 billion.
Profit attributable to owners of the company for the third quarter declined to $434 million or $0.76 per share from $458 million or $0.80 per share in the prior year, reflecting higher costs and expenses that offset a rise in revenues. Analysts expected earnings of $0.72 per share for the quarter.
The results are on the basis of International Financial Reporting Standard or IFRS.
Quarterly revenues rose to $1.911 billion from $1.806 billion in the previous year. Wall Street expected revenues of $1.86 billion for the quarter.
A major portion of the company's revenue is generated in the U.S. Infosys competes with Tata Consultancy Services Ltd. (532540), Wipro Ltd. (WIT) and Accenture Plc (ACN).
Cost of sales climbed 17 percent to $1.203 billion and operating expenses rose slightly to $217 million.
Infosys said it was able to maintain its margins through efficiency improvements despite increased operating expenses.
In rupee terms, net profit slid to 23.69 billion rupees from 23.2 billion rupees while revenue grew to 104.24 billion rupees from 92.98 billion rupees.
Infosys and its subsidiaries added 53 clients during the quarter. The company also reported a net addition of 977 employees, compared to 2,610 employees in the preceding quarter.
In November 2012, the IT major had deferred hiring 17,000 new recruits by three months. In the following month, it reportedly postponed the joining dates of around half of the 35,000 employees it planned to recruit this fiscal due to continuance of sluggish growth.
The stock is surging 13.26 percent on the Bombay Stock Exchange.
by RTT Staff Writer
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