Cognizant, on Wednesday, posted a 16.6 per cent rise in first-quarter profit at $284.2 million on the back of a strong revenue growth that was largely in line with market expectations, driven mainly by robust spending from top clients in Europe.
The company had reported a net profit of $243.7 million for the January-March quarter of 2012.
It follows a January-December reporting period.
While the company has maintained its full year forecast of 17 per cent revenue growth, ahead of industry body Nasscom’s growth estimate of 12 – 14 per cent for software exports, its quarterly revenue rose to $2.02 billion, up 18 per cent from the year-ago quarter.
The strong results come at a time when rivals Infosys and Wipro continue to disappoint in terms of growth rates and have also disappointed investors with their forecasts.
The New Jersey-based firm, which has a majority of its employees in Chennai, also forecast a near 5 per cent sequential rise in revenue for the ongoing April – June quarter, hinting at a stronger year for the IT industry.
Analysts were mostly expecting the company to post first quarter revenue of $2.01 billion. The company now expects its revenues for the second quarter to be “at least $2.13 billion.”
“Our performance during the first quarter was strong, and we are encouraged by the healthy demand for our broad range of services,” said Francisco D’Souza, Chief Executive Officer, in a statement.
“We continue to make solid progress developing emerging offerings in new markets, new SMAC technologies, and new non-linear solutions and services,” Mr. D’Souza added.
The net headcount addition for the quarter was approximately 6,000, taking the total headcount to over 1.60 lakh employees.
The company also announced that its board of directors had approved an expansion of its stock repurchase programme. The board increased the stock repurchase programme by $500 million to $1.5 billion, and extended the term of the programme to December 31, 2014. To date, the company has repurchased $940 million of its shares under this programme.
On the impact of the impending U.S immigration reform, Cognizant said that its clients were understanding and would soon weigh in on the matter.
“Our clients are first understanding the bill. Many have called us to express support. As others have become aware of how the current proposal might impact their own operations, we believe that they will make their concerns known to policymakers. Our clients understand that we are the very front-end of a long process,” R. Chandrasekaran, Group Chief Executive, Technology and Operations, told The Hindu.