Cognizant Q3 net rises over 15% to nearly $320 million

Cognizant Technology Solutions Corp has posted 15.4-per cent jump in net profit for the third quarter ended 30 September 2013, boosted by revenues from North America and growth in European business.

The US-based company, which has most of its 166,400 employees in India, saw net profit for the July-September 2013 quarter rise to $319.6 million, from $276.9 million during the year-ago quarter.

Revenues for the quarter rose 6.7 per cent to $2.31 billion on a sequential basis and by 21.9 per cent from $1.89 billion in the year-ago quarter, helped by rising demand for outsourcing services and uptick in discretionary spend on consulting and technology services, the company said.

Cognizant also displaced India's top software exporter Tata Consultancy Services Ltd (TCS) in terms of revenue from North America - the biggest market for India's IT industry.

Cognizant's revenue from the region grew 18.5 per cent to $1.783 billion during the quarter, more than the $1.775 billion reported by TCS.

Cognizant reported faster revenue growth than its top Indian competitors, including Tata Consultancy Services, Infosys, Wipro and HCL Technologies, for the quarter ended 30 September 2013, both sequentially and annually.

Teaneck, New Jersey-based Cognizant reported quarterly revenue of $2.31 billion, up 6.7 per cent sequentially and 21.9 per cent from the year-ago quarter. Quarterly diluted EPS on a GAAP basis was $1.05, compared to $0.91 in the year-ago quarter.

Cognizant expects annual revenue to grow 20.3 per cent to $8.84 billion, against its August forecast of $8.74 billion, and at a faster than industry body Nasscom's projection of 12-14 per cent growth for Indian software exports in 2013-14.

Chief executive Francisco D'Souza said 2014 could be even stronger for the company as customers have indicated that they will increase spending on technology.

"We delivered yet another quarter of industry-leading growth that was broad-based across our portfolio of industries, services and geographies," said D'Souza. "The sheer velocity of change in the industries we serve is driving the C-suite to challenge the status quo and rethink their business models to be relevant for the future. Our investments across multiple horizons of growth position us well to deliver differentiated value as we partner with clients in this journey."

Cognizant expects its fiscal 2013 revenue to be at least $8.84 billion, up at least 20.3 per cent compared to 2012. EPS is expected to be at least $4.01 on a GAAP basis, and $4.37 on a non-GAAP basis.

EPS guidance excludes any fourth quarter net non-operating foreign exchange gain or loss, the company said. 

"Our strong performance in the quarter allows us to once again increase our full year revenue and EPS guidance and further strengthens our balance sheet," said Karen McLoughlin, chief financial officer.

"During the quarter, we increased total cash and short-term investments by $460 million to almost $3.4 billion," McLoughlin added.