Cognizant net income up 21 per cent

Cognizant Solutions has announced its net income for the fourth quarter ending December 31, 2006 at $69.5 million, an increase of 21 per cent compared with $57.7 million in the fourth quarter of 2005.

Cognizant's revenues for the fourth quarter, increased to $424.4 million, up 65 per cent from $377.5 million in the year-ago quarter and 12 per cent on a sequential basis.

Total annual revenues to December 2006 increased to $1.424 billion, up 61 per cent from $885.8 million in December 2005. Cognizant's guidance anticipates total revenues to be at least $2.04 billion by the end of December 2007.

Operating margin under GAAP for the quarter was 18 per cent. This excluded a stock-based compensation expense of $8.1 million during the fourth quarter. GAAP operating margin for the entire year was 18.2 per cent .

Excluding stock-based compensation expense of $29.9 million during the year, non-GAAP operating margin was 20.3 per cent. Diluted EPS on a GAAP basis for the quarter was $0.46 per diluted share, compared with $0.39 a diluted share in the fourth quarter of 2005. For the full year ended December 2006, diluted EPS was $1.55 compared with $1.13 in 2005.

Cognizant added almost 4,500 employees in the fourth quarter and more than 14,500 employees in calendar 2006. It expects to add over 17,000 people more to its total headcount of over 40,000 by the end of 2007, when the total employee population is expected to reach at least 56,000 people.

Francisco D'Souza, president and CEO of Cognizant said, "During the quarter, we capitalised on the escalating demand for our entire portfolio of services to win many new clients. We continue to see strong growth in our newer customer markets, particularly Europe, where business more than doubled in the last year. Our growth strategy and strong leadership team will continue to drive strong performance in 2007."