Information technology services provider Cognizant Technology Solutions Corp. (CTSH) reported Wednesday a profit for the first quarter that increased 17 percent from last year, reflecting double-digit revenue growth amid improvements across its operating segments and regions.
Adjusted earnings per share were also higher from the prior year, while quarterly revenues topped estimates. The company also provided earnings and revenue outlook for the second quarter and backed its guidance for the full-year 2013.
"Our performance during the first quarter was strong, and we are encouraged by the healthy demand for our broad range of services. We continue to make solid progress developing emerging offerings in new markets, new SMAC technologies, and new non-linear solutions and services," CEO Francisco D'Souza said.
The Teaneck, New Jersey-based company reported net income of $284.21 million or $0.93 per share for the first quarter, higher than $243.65 million or $0.79 per share in the prior-year quarter. Excluding items, adjusted earnings for the quarter was $1.02 per share, compared to $0.88 per share in the year-ago quarter.
On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $0.93 per share for the first quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 18.1 percent to $2.02 billion from $1.71 billion in the same quarter last year, and topped twenty-three Wall Street analysts' consensus estimate of $2.01 billion by a whisker.
Financial Services revenue increased 23.1 percent to $855 million, healthcare revenues grew 9.1 percent to $510 million, and manufacturing/Retail/Logistics revenues were $426 million, up 27.2 percent from last year.
North American revenue increased 16.3 percent to $1.58 billion, European revenues grew 22.7 percent to $348 million, and rest of the world revenues totaled $90 million, up 35.4 percent from last year.
Operating margin contracted 50 basis points to 18.1 percent from last year, and adjusted operating margin declined 90 basis points to 19.9 percent, but came within the company's targeted 19 percent to 20 percent range.
Cognizant's net headcount addition for the first quarter was about 6,000.
The company noted that it recently launched a portfolio of Cognizant BusinessCloudSM solutions that will enable clients to quickly deploy a range of business and best-in-class IT solutions and to forgo costly capital outlays and lengthy implementation timelines.
Looking ahead to the second quarter, the company expects adjusted earnings of $1.06 per share, on projected quarterly revenues of at least $2.13 billion. Analysts estimate earnings of $0.97 per share for the quarter, on revenues of $2.11 billion.
For fiscal 2013, Cognizant Technology continues to anticipate adjusted earnings of at least $4.31 per share, on annual revenues of at least $8.60 billion. Street is currently looking for full-year 2013 earnings of $4.00 per share, on revenues of $8.63 billion.
Additionally, Cognizant's board has increased the stock repurchase program by $500 million to $1.5 billion from $1 billion, and extended the term of the program to December 31, 2014.
CTSH closed Tuesday's regular trading session at $64.88, down $0.86 on a volume of 4.86 million shares. In the past 52-week period, the stock has been trading in a range of $53.92 to $81.08.
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