Information technology services provider Cognizant Technology Solutions Corp. (CTSH) Tuesday said its fourth-quarter profit grew over 28% from last year, helped by a 20% increase in revenues. Further, the company guided the first quarter and full year 2010 above Wall Street expectation.
The Teaneck, New Jersey-based company said fourth-quarter net income increased to $144 million or $0.47 per share from $112.29 million or $0.38 per share in the previous year.
Adjusted to exclude stock-based compensation expense, earnings per share were $0.50, compared to $0.41 last year.
On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.46 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that both GAAP and non-GAAP earnings per share include the impact of $0.01 in net non-operating foreign currency exchange losses.
The company's third-quarter net income was $136.57 million or $0.45 per share.
Revenues for the fourth quarter increased to $902.72 million from $753.04 million last year. Analysts were looking for revenues of $887.85 million for the quarter. Cognizant's third-quarter revenues were $853.49 million.
Income from operations for the fourth quarter increased to $166.91 million from $142.67 million in the prior year. Operating margin slipped to 18.5% from last year's 18.9%, while other expenses dropped to $4.45 million from $12.34 million. Excluding stock-based compensation expense of $12.8 million, non-GAAP operating margin was 19.9%, in line with the company's targeted 19%-20% range.
Net income for 2009 increased to $534.96 million or $1.78 per share from last year's $430.85 million or $1.44 per share. Full-year revenues increased to $3.279 billion from $2.816 billion in the prior year. Wall Street expected 2009 earnings of $1.76 per share on revenues of $3.26 billion.
Looking ahead to the first quarter, the company expects GAAP earnings of $0.48 per share. Excluding $0.04 of estimated stock-based compensation expense, earnings are expected to be $0.52 per share. First-quarter 2010 revenue is anticipated to be at least $935 million. Wall Street looks for 2010 first-quarter earnings of $0.47 per share on revenues of $912.62 million.
For fiscal 2010, the company expects GAAP earnings of $2.03 per share and non-GAAP earnings of $2.19 per share. Non-GAAP earnings expectation excludes $0.16 of estimated stock-based compensation expense.
Fiscal 2010 revenue is expected to be at least $3.935 billion, up at least 20% from 2009. Analysts expect the company to earn $2.01 per share in 2010 on revenues of $3.92 billion.
Cognizant said the earnings per share guidance excludes any non-operating foreign currency exchange gain or loss due to continued volatility in the currency markets.
According to Gordon Coburn, chief financial and operating officer of the company, ''Cognizant delivered exceptional performance in 2009. A continued focus on operational excellence, combined with aggressive hiring in the latter part of last year, leaves us well positioned for a strong 2010."
Among others in the industry, India-based business software and services company Wipro Ltd. (WIT) last month reported higher profit for the third quarter, helped by an improvement in demand, steady margins and a rise in volumes. Third-quarter profit attributable to equity holders of the company on a IFRS basis grew to INR 12.032 billion or US$259 million from INR 10.098 billion in the prior year. Earnings per equity share advanced to INR 8.19 or US$0.18 from INR 6.91 in the previous year. Total revenues for the third quarter increased 6% to INR 69.77 billion or US$1.50 billion.
Infosys Technologies Ltd. (INFY), another peer, said in January that its third-quarter IFRS profit edged up to $334 million or $0.59 per ADS from $332 million or $0.58 per ADS in the same quarter last year. IFRS revenues for the quarter rose to $1.232 billion from $1.171 billion reported last year.
CTSH closed Monday's regular trade at $43.74, up from the previous close of $43.66, on 3.68 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.