India-based software exporter Infosys Technologies Ltd (INFY, 500209, INFOSYSTCH) Friday reported higher profit for the second quarter amid a modest growth in revenues, as global economic uncertainties continued to haunt the industry. Earnings met Wall Street consensus estimates.
Further, the company revised its full year profit forecast downwards in order to reflect the change in exchange rate and said its finance chief V. Balakrishnan is stepping down. The stock is losing close to 7 percent in early morning trade.
Profit attributable to owners of the company climbed to $431 million from $411 million in the prior year and $416 million in the preceding firs quarter. The results are on IFRS basis.
Earnings per American Depositary Share or EPADS advanced to $0.75 from $0.72. On average, 12 analysts polled by Thomson Reuters expected earnings of $0.75 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues increased 2.9 percent to $1.797 billion from $1.746 billion in the previous year. Analysts expected revenues of $1.81 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).
In rupee terms, net profit increased to 23.7 billion Indian rupee from 19.1 billion rupee and revenues climbed to 98.6 billion rupee from 80.1 billion rupee.
Infosys and its subsidiaries added 39 clients during the quarter. The company also reported a net addition of 2,610 employees.
Infosys declared an interim dividend of 15 rupee per ADS, equivalent to an interim dividend of $0.28 per ADS, at the prevailing exchange rate of 53 rupee per U.S. dollar.
S. D. Shibulal, CEO and Managing Director, said, "Global economic uncertainties continue to face the industry. We have increased employee wages, used some of our cash in a transformational
acquisition of a consulting business and enhanced our investment in R&D and solutions. These
initiatives will position us well in the industry and provide a strong platform for future growth."
Further, Infosys said its finance chief V. Balakrishnan would give up his position from October 31, as he believes younger people should get strategic opportunities to shape the company. Rajiv Bansal, currently Vice President -Finance, will take over as CFO from November 1.
Balakrishnan will continue as a member of the Board and will be responsible for Business Process Management or Infosys BPO, Finacle and the India Business Unit.
For the fiscal year ending March 31, 2013, the company expects earnings per ADS of at least $2.97. In July, the company had expected fiscal 2013 earnings of $3.03 per ADS, which has now been reset at the current exchange rate at $2.97.
Revenues are still expected to be at least $7.343 billion for the year, which is a year-over-year growth of 5 percent and a 5.7 percent increase in constant currency terms.
Wall Street expects full year earnings of $3.04 per share on revenues of $7.37 billion.
The stock is currently declining 6.8 percent in early morning trade on the Bombay Stock Exchange at 2,358.85 rupee.
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