Cognizant Q4 Net up 16.3%; gives slower rev guidance in 2014

IT major Cognizant today reported a 16.3 per cent rise in net profit for the fourth quarter ended December 31 but forecast at least 16.5 per cent revenue growth in 2014, which is slower than this year's rate.
The New Jersey-headquartered firm -- which last month celebrated its 20th anniversary -- posted a net profit of USD 324.3 million in October-December 2013 from USD 278.8 million in the year-ago period, helped by growth in financial services and healthcare and improved business from North America and Rest of Europe (excluding the UK).
Revenues for the reported quarter rose 20.4 per cent to USD 2.36 billion in October-December 2013 from USD 1.95 billion in the same quarter of 2012. It follows January-December fiscal.

For the entire 2013 fiscal, the Nasdaq-listed firm's revenues rose by 21 per cent to USD 8.843 billion, while net profit was up by 17.1 per cent to USD 1.23 billion.
Providing revenue guidance for 2014, the company said it expects revenues to grow by at least 16.5 per cent compared to 2013, which is lower than 20.4 per cent growth in last fiscal.
Cognizant said it expects revenues of USD 2.42 billion in January-March 2014 and USD 10.3 billion for the 2014 fiscal.

"We further strengthened our balance sheet during 2013, allowing us to continue to support our industry-leading growth, by investing in service line capabilities, industry expertise, new technologies, delivery platforms and expanded geographical reach," Cognizant CFO Karen McLoughlin said.

On a quarter-on-quarter basis, Cognizant's revenues were up by 2.2 per cent and net profit rose by 1.5 per cent.
In the July-September quarter, it had posted revenues of USD 2.31 billion and net profit of USD 319.6 million.
Commenting on the performance, Cognizant president Gordon Coburn said: "Our growth during 2013 was broad-based across our industries, geographies and service lines."
This "strong growth" was fueled by clients' on-going drive to 'run better' for efficient and productive operations and to 'run different' to create the capabilities and business models they need for future success, he added.
"Our strategy through these twenty years has been to challenge the status quo and constantly reinvent for the future, thus positioning us to help our clients build stronger businesses. We believe that we are well positioned to continue to do so in 2014 and beyond," Cognizant CEO Francisco D'Souza said.

The company added about 5,000 people (net) during the December quarter taking its total headcount to around 171,400 at the end of December 2013.
Though, Cognizant is not listed on the Indian bourses, about 75 per cent of its employees are based in India.
In a concall, McLoughlin said: "We have significantly expanded our market presence, with revenue outside of North America approaching USD 2 billion for 2013."
The firm closed the December quarter with about USD 3.7 billion of cash and short-term investments.
Cognizant scrips yesterday rose by 1.92 per cent to settle at USD 97.01 apiece on NASDAQ.