Cognizant Q3 net up 11%; eyes 10% revenue growth in 2017

US-based IT major Cognizant today posted 11.4 per cent rise in September quarter's net profit to USD 495 million from the year-ago period, driven by strong growth in segments like healthcare.
The company, which has a majority of its employees based in India, has also revised its revenue growth outlook to 9.5- 10 per cent this year.
Cognizant follows January-December as financial year. Its net profit stood at USD 444 million in July-September 2016.
The company's revenues rose 9.1 per cent to USD 3.77 billion in the third quarter, meeting its guidance range of USD 3.73-3.78 billion for the period.

For the fourth quarter, Cognizant expects revenues to be in the range of USD 3.79-3.85 billion.
"For 2017, we've delivered three consecutive quarters of strong execution at the top and bottom lines. This consistent performance underscores the soundness of our strategy and investments, and the continuing strong demand for our portfolio of services," Cognizant CEO Francisco D'Souza said.

He added that three of its four business segments were strong contributors to its performance this quarter.
"Healthcare (9.3 per cent year-on-year growth), Products and Resources (14 per cent), and Communications, Media and Technology (18.2 per cent) averaged double-digit growth rates," he said.

This is the third time that Cognizant has revised its revenue growth outlook for the year. At the beginning of the year, it had forecast growth to be 8-10 per cent, which was later revised to 9-10 per cent.
The guidance has now been further revised to 9.5-10 per cent or USD 14.78-14.84 billion in revenue for the year 2017.
The company exited the quarter with about USD 4.7 billion of cash and short-term investments.
Cognizant added seven strategic customers in the quarter, bringing the total number of such clients to 350.
Its total headcount stood at 2,56,100 at the end of the reported quarter, lower by 700 people from April-June 2017 quarter.

The annualised attrition stood at 22.5 per cent during the quarter, including BPO and trainees.
"While we will of course carefully manage headcount, we will continue to hire and invest in critical skills needed to grow our digital business as well as work to bring voluntary attrition back to more normal levels," Cognizant CFO Karen McLoughlin said.
Also, the company completed the USD 1.5 billion ASR accelerated share repurchase) programme in the third quarter and received and retired 2.2 million shares.
This is in addition to the 21.5 million shares received and retired at the commencement of the ASR in March, McLoughlin said.