Cognizant logs USD 18 mn loss in Q4

US-based IT major Cognizant today posted a net loss of USD 18 million for the December 2017 quarter, on account of one-time provisional income tax expense of USD 617 million related to the Tax Reform Act in the US.
The company posted a profit of USD 416 million in the year-ago period.
Cognizant, which competes with Indian firms like TCS and Infosys, saw its revenue grow 10.6 per cent to USD 3.83 billion in the fourth quarter of 2017 from USD 3.46 billion in the year-ago period, Cognizant said in a statement.
During 2017, the company saw its revenue rise 9.8 per cent to USD 14.81 billion, meeting the company's topline forecast of 9-10 per cent during the year. Its net profit was at USD 1.5 billion in 2017.

For 2018, Cognizant expects its revenue to be in the range of USD 16-16.30 billion, translating to a topline growth of 8-10.1 per cent.
Cognizant said its first quarter revenue is expected to be in the range of USD 3.88-3.92 billion, a growth of 9.3-10.4 per cent year-on-year.

"Consistent and solid execution throughout 2017, along with continued investments to further accelerate the shift to Digital during the year, gives us confidence that we can deliver a strong 2018," CEO Francisco DSouza said.
He added the company expects "a new generation of digital heavyweights emerging" as clients invest in new technologies like artificial intelligence, analytics, and cloud.

In December, the US enacted the Tax Reform Act, which significantly revised the US corporate income tax law by reducing the US federal statutory corporate income tax rate from 35 per cent to 21 per cent starting in 2018.
Among other provisions, the Act also implemented a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries.
The company said it recorded a one-time provisional income tax expense of USD 617 million, which was "primarily attributable to the deemed repatriation tax on undistributed earnings of foreign subsidiaries".
"We expect our overall effective corporate income tax rate to be approximately 24 per cent for 2018 and 24-26 per cent beginning in 2019," it added.