Thursday, Syntel, Inc. (SYNT), an information technology and knowledge process outsourcing service provider, reported an increase in net income for the third quarter and raised its full year per share earnings outlook. The rise in profit primarily reflect improved margins. Per share earnings and revenues were higher than analysts' expectations.
Syntel's third quarter net income rose to $30.25 million or $0.73 per share from $22.15 million or $0.54 per share last year. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.59 per share for the third quarter. Analysts' estimates typically exclude special items.
Troy, Michigan-headquartered Syntel's net revenues rose slightly to $104.70 million from $103.77 million for the same quarter last year. Analysts estimated revenues of $102.78 million for the quarter.
Commenting on the third quarter performance, President and Chief Executive Officer Keshav Murugesh said, "Increasing stability in the business environment and a gradual improvement in customer confidence had a positive effect on our top line during the third quarter."
Applications outsourcing revenues contributed 74% of total revenue and knowledge process outsourcing accounted for 18% of the total revenue, the company said.
The company's cost of revenues dropped to $53.09 million from $57.81 million a year-ago and selling, general and administrative expenses came down to $18.93 million from $19.82 million for the year earlier period.
Syntel's gross margin improved year-over-year to 49.3% from 44.3% a year-ago.
For the nine months, net income rose to $82.71 million or $1.99 per share from $60.00 million or $1.45 per share for the prior year quarter. However, net revenues declined to $301.23 million from $305.70 million a year earlier.
Looking ahead, based on rate assumption of 47.0 Indian rupees to $1, the company raised its full year earnings guidance to $2.60 to $2.65 per share, but narrowed revenue guidance to the range of $405 million to $408 million. Earlier, Syntel expected earnings to range in between $2.40 - $2.50 per share and revenue in the range of $395 million - $415 million.
Analysts currently expect the company to earn $2.45 per share on revenues of $404.38 million.
SYNT is currently trading at $41.44, down $0.17 or 0.40% on volumes of 219.43 thousand shares on Nasdaq.
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