Reports 16 per cent rise in Q4 net profit at $278.8 million
Analysts looking to IT major Cognizant for confirmation of a revival in the software services sector were left with a mixed bag, with Cognizant reporting moderately better-than-expected quarterly profit but forecasting a lower revenue growth for 2013.
The company reported a 16 per cent rise in net profit at $278.8 million, compared to $240.1 million in the fourth quarter of 2011. Cognizant follows a January – December reporting year.
The New Jersey-based firm also managed to retain its lead over rival Infosys and reported revenue of $1.95 billion (sticking to its guidance) in the December quarter—slightly higher than the $1.91 billion reported by Infosys.
“When confronting their business challenges, clients not only look to Cognizant to help them run their operations better, but increasingly turn to us to help them run their operations differently in order to differentiate themselves in the market and drive top line growth,” said Gordon Coburn, President of Cognizant, in a statement.
In the first quarter of 2013, Cognizant expects its revenues to be “at least $ 2 billion”. For the whole year, however, the firm is looking at its revenues growing by 16 per cent to at least $8.6 billion. This is against the 20 per cent growth in revenues it achieved in 2012.
“Generating growth of 20% within a tough demand environment of 2012 is a testament to our business model,” said Karen McLoughlin, Chief Financial Officer. “Furthermore, 2012 was a strong year of cash generation. Our cash and short-term investments balances grew by $430 million during the year, after covering over $480 million of share repurchases,” she added.
The company, which has large development centres in India, said that net headcount addition for the quarter exceeded 6,300 to end the year at around 156,700.
“Given our consulting and domain expertise, Cognizant is uniquely positioned to address clients’ dual mandate of running better and running different from one global platform,” said Francisco D’Souza, Chief Executive Officer, Cognizant.