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Infosys Technologies Q2 Profit Rises; Lifts FY11 Forecast - Update

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Indian software services firm Infosys Technologies Ltd. (INFY) Friday reported a higher profit for the second quarter, helped by nearly 30% growth in revenues. Earnings per American Depositary Share rose from last year and topped Wall Street consensus estimate. Further, the company boosted its fiscal 2011 forecast.

On an IFRS basis in Indian rupees, net profit after tax rose to Rs.1,737 crore or Rs 30.40 per share from Rs 1,535 crore or Rs 26.87 per share in the prior year. Revenues increased to Rs 6,947 crore from Rs. 5,585 crore in the prior year. All segments reported revenue growth, with Financial Services revenues showing significant growth.

The Bangalore, India-based company reported net income after tax of $374 million or $0.65 per ADS for the just concluded quarter, up from $317 million or $0.56 per share in the same quarter last year. The earnings exceeded the $0.59 to $0.60 guidance issued by the company.

On average, 12 analysts polled by Thomson Reuters expected the company to earn $0.60 per share in the quarter. Analysts' estimates typically exclude special items.

Net income for the first quarter was $326 million or $0.57 per ADS.

Revenues increased 29.6% to $1.48 billion from $1.15 billion in the previous year. Analysts expected revenues of $1.42 billion. First-quarter revenues totaled $1.358 billion.

Further, Infosys declared an interim dividend of Rs 10 per ADS and a 30th year special dividend of Rs 30 per ADS. The record date for payment of dividend is October 22.

Infosys and its subsidiaries added 27 clients during the quarter.

S. Gopalakrishnan, CEO and Managing Director of Infosys, said, "Though the economic environment continues to be challenging, we have leveraged our client relationships, solutions and investments to grow faster in this quarter. There are significant drivers for investment in Information Technology since any transformation program to 'build tomorrow's enterprises' requires these investments to be made."

Looking ahead, the software exporter expects third-quarter earnings per ADS in the range of $0.66 to $0.67 and revenues are estimated to range from $1.58 billion to $1.56 billion. Analysts estimate the company to report earnings per share of $0.64 on $1.47 billion revenues for the December quarter.

For fiscal year ending March 31, 2011, the company currently expects earnings per ADS to be in the range of $2.54 to $2.58 and revenues to be in the range of $5.95 billion to $6.00 billion. Wall Street looks for earnings of $2.50 per share on $5.79 billion in revenues for fiscal 2011.

The company's previous fiscal year forecast was for consolidated earnings per ADS of $2.42 to $2.52 and consolidated revenues of $5.72 billion to $ 5.81 billion.

Infosys stock is currently trading on the Bombay Stock Exchange at Rs 3,132.75, down Rs 51.50 or 1.62%.

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