Cognizant posts slowest quarterly revenue growth in 14 years

IT services provider Cognizant Technology Solutions reported its slowest quarterly revenue growth in 14 years as its clients in the financial and healthcare services held back on spending.

Shares of the company, which also forecast second quarter earnings below estimates, fell about 1% in premarket trading.

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"As anticipated, during the first quarter we saw softness in our healthcare segment due to M&A activity, as well as softness in our banking segment due to financial market volatility." president Gordon Coburn said on Friday.

Like its Indian rivals Tata Consultancy Services, and Infosys, Cognizant also gets the largest chunk of its revenue from financial services clients.

The company said it expects second quarter revenue between $3.34 billion-$3.40 billion and adjusted earnings between $0.80-$0.82.

Analysts on an average had expected a profit of 84 cents per share and revenue of $3.41 billion, according to Thomson Reuters I/B/E/S.

The company's net income rose to $441.2 million, or 72 cents per share, in the first quarter ended March 31, from $382.9 million or 62 cents per share, a year earlier.

Revenue from its financial services sector, which accounts for more than a third of its total revenue, rose 10.7%, while revenue from healthcare services rose 4%.

The company's revenue also rose 10% to $3.20 billion, helped by higher demand for its digital services.

Analysts on an average had expected a quarterly profit of 79 cents per share and revenue of $3.23 billion, according to Thomson Reuters I/B/E/S.