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Cognizant posts Q1 profit rise

05 May 2010  |  2421 views  |  0 Source: Cognizant

Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting and business process outsourcing services, today announced its first quarter 2010 financial results.

Highlights - First Quarter 2010

  • Quarterly revenue rose to $959.7 million, up 28.7% from the year-ago quarter and 6.3% sequentially.
  • Quarterly diluted EPS on a GAAP basis was $0.49, compared to $0.38 in the year-ago quarter.
  • Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation and applicable stock-based Indian fringe benefit tax expenses, was $0.53, compared to $0.41 in the year-ago quarter.
  • GAAP and non-GAAP diluted EPS includes the impact of $0.03 in net non-operating foreign currency exchange losses.

Revenue for the first quarter of 2010 rose to $959.7 million, up 28.7% from $745.9 million in the first quarter of 2009. GAAP net income was $151.5 million, or $0.49 per diluted share, compared to $113.1 million, or $0.38 per diluted share, in the first quarter of 2009. Diluted earnings per share on a non-GAAP basis was $0.53. GAAP operating margin for the quarter was 19.1%. Excluding stock based compensation expense of $13.9 million, non-GAAP operating margin was 20.5%, above the Company's targeted 19-20% range. Earnings for the quarter included $10.5 million, or $0.03 per share, of net non-operating foreign currency exchange losses. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.

"Against the backdrop of an improving macroeconomic environment, our first quarter results confirm that our strategy of reinvestment continues to provide the platform for industry-leading growth," said Francisco D'Souza, President and CEO of Cognizant. "The opportunities for further penetration within our core services market remain significant. Our investments during the downturn - in new areas including consulting and emerging markets; new solutions such as enterprise analytics; and, new technologies such as cloud and mobile computing - have left us stronger than ever before. Looking forward, we will continue to invest in new business opportunities and areas where Cognizant is underpenetrated to ensure that we remain relevant to our clients and have a robust pipeline of growth opportunities to fuel Cognizant's future growth."

2010 Outlook - Second Quarter & Full Year

The Company is providing the following guidance:

  • Second quarter 2010 revenue anticipated to be at least $1.015 billion.
  • Second quarter 2010 diluted EPS is expected to be $0.51 on a GAAP basis and $0.55 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation expense.
  • Fiscal 2010 revenue expected to be at least $4.1 billion, up at least 25% compared to 2009.
  • Fiscal 2010 diluted EPS expected to be at least $2.10 on a GAAP basis, and at least $2.26 on a non-GAAP basis, which excludes $0.16 of estimated stock-based compensation expense. Full-year EPS guidance is inclusive of the $0.03 net non-operating foreign currency exchange loss in the first quarter.
  • Due to continued volatility in the currency markets, EPS guidance excludes any future non-operating foreign currency exchange gain or loss.

"Our aggressive hiring throughout the world during the past two quarters positions us well to meet the broad demand for our services," said Gordon Coburn, Chief Financial and Operating Officer. "Opportunities to capture additional operational efficiencies, combined with an improving pricing environment, provide the levers to absorb expected wage inflation while achieving full-year operating margins within our targeted range of 19-20%, excluding stock-based compensation expense."

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