Cognizant Technology net up 26%

Nasdaq listed Cognizant Technology Solutions reported a 26 per cent increase in net profit at $103.9 million during the second quarter ended June 30 compared to $82.3 million for the same period last year. Company's revenue increased to $685.4 million from $643.1 million, an increase of 6.6 per cent.

The company has reported better sequential revenue growth compared to other Indian listed IT majors like Infosys (1.1%), Satyam (3.9%), Wipro (3.5%) and TCS (0.5%) for that quarter.

Cognizant traditionally which has been focussing on the American market had only recently started focussing on European markets. This move has paid off with the revenues from Europe crossing 20 per cent mark during the quarter.

 

During the second quarter, BFSI business grew 7 per cent, Healthcare - 3 per cent; Manufacturing/Retail -- 10 per cent, other segments, includes communications, information, media and entertainment and high technology business areas, rose by 7 per cent.

Cognizant's Generally Accepted Accounting Principles (GAAP) net income was $103.9 million compared to $82.3 million. GAAP operating margin for the quarter was 17.5 per cent. Excluding stock-based compensation expense of $10.5 million and stock-based Indian fringe benefit tax expense of $5.9 million, non-GAAP operating margin was 19.8 per cent, in line with the Company's targeted 19 per cent to 20 per cent.

"Despite continued uncertainty in the marketplace, company exceeded our quarterly revenue guidance and our sequential growth once again outpaced our peer group in the second quarter," said Francisco D'Souza, president and EO of Cognizant. "Several business segments, including financial services, performed well during the quarter. 

Furthermore, company generated continued strong performance across Europe and healthy growth from our Business/Knowledge Process Outsourcing and IT Infrastructure Services practices as a result of clients' focusing on cost efficiencies."
Cognizant expects third-quarter earnings of 37 cents, or 41 cents excluding items, on revenue of at least $723 million. For fiscal 2008, the company now expects earnings of at least $1.44 a share, or $1.61 excluding items, on revenue of at least $2.81 billion.