Indian software exporter Infosys Technologies Ltd (INFY: Quote) Friday posted a drop in profit for the fourth quarter, as economic uncertainties remain challenging for the IT industry. The company issued a weak revenue outlook for fiscal 2014, sending its stock down by more than 18 percent in early morning trading on the Bombay Stock Exchange.
The company's profit declined to $444 million or $0.78 per American Depositary Share or ADS from $463 million or $0.81 per ADS in the previous year. The results are on the basis of International Financial Reporting Standards or IFRS.
On average, 11 analysts polled by Thomson Reuters expected earnings of $0.74 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter increased 9.4 percent to $1.938 billion from $1.771 billion in the prior year. The top line grew 1.4 percent sequentially. Analysts expected revenues of $1.99 billion.
A major portion of the company's revenue is generated in the U.S. Infosys competes with Tata Consultancy Services Ltd., Wipro Ltd. (WIT) and Accenture Plc (ACN).
S. D. Shibulal, CEO and Managing Director, said, "Global economic uncertainties remain challenging for the IT industry. We are progressing well on our strategic direction of building a high-quality company which is relevant to our clients."
Cost of sales increased at a faster rate than the revenues, resulting in lower operating profit of $457 million compared to $528 million last year.
In rupee terms, net profit advanced 3.4 percent to 23.94 billion rupee and revenue climbed more than 18 percent from last year to 104.54 billion rupee.
Infosys and its subsidiaries added 56 clients during the quarter and net addition of employees totaled 1,059.
The Board of Directors recommended a final dividend of 27 rupee per ADS for fiscal 2013, equivalent to final dividend of about $0.50 per ADS at the prevailing exchange rate.
The company said the global currency market continues to be volatile due to the uncertain economic environment and that its hedging strategy helps minimize the volatility impact.
Further, Infosys said it has decided to set aside up to $100 million to invest in products, platforms and solutions ideas in line with Infosys 3.0 strategy.
The company has appointed Leo Puri, a Senior Advisor to McKinsey & Company's Asia-Pacific Financial Institution Practice, as an additional director of the company with effect from April 11.
Looking ahead to the fiscal ending March 31, 2014, the company sees revenue growth of 6-10 percent from $7.398 billion generated in fiscal 2013. Analysts expect revenues of $8.25 billion for the year.
The stock is declining 18.38 percent in early morning trading at 2,381.55 rupee.
by RTT Staff Writer
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