ET Bureau BENGALURU: Cognizant Technology Solutions sprang a surprise and predicted an indifferent first quarter citing lower spending from key customers, disappointing investors who punished the stock during early-morning trade on Nasdaq.
In a conference call with investors and analysts, Chief Executive Francisco D'Souza said the company would see a "slow start" to the year because some banking and financial services customers had put projects "on hold." Cognizant counts the likes of JP Morgan Chase and Merck among its top clients.
I don't have a good view as to when that will get resol ved. As of now it's a wait-and-see approach for banking and financial services," D'Souza said during the call. At market opening on Monday, shares of the company were down 7.4% to $54.2.
For the March quarter, Cognizant forecast revenue in the range of $3.18 billion to $3.24 billion, indicating negligible growth on a sequential basis from the De cember quarter.
According to Reuters estimates, analysts on average were expecting Cognizant's March-quarter revenue forecast at $3.32 billion. "There's a fair amount of discretionary spending that kicks in for us during the early part of the year...we are seeing some of that get deferred," said D'Souza.
For the December quarter, Cognizant posted a 17% growth in profit that marginally came in ahead of expectations and forecast full-year revenue growth between 10-14% for 2016, well below its industry-leading performance in 2015. Software industry lobby Nasscom has predicted 1012% revenue growth for exports for FY17.
Cognizant, which follows a January-December reporting cycle, predicted revenue for 2016 in the range of $13.65 billion to $14.20 billion. For the December quarter, net profit came in at $423.4 million, compared to $362.9 million a year ago. Revenue jumped nearly 18% to $3.23 billion, in line with market expectations.
Cognizant shares closed down 7.7% to $54.05 on Nasdaq on Tuesday.
In a conference call with investors and analysts, Chief Executive Francisco D'Souza said the company would see a "slow start" to the year because some banking and financial services customers had put projects "on hold." Cognizant counts the likes of JP Morgan Chase and Merck among its top clients.
"Healthcare will have a slow start to the year, with a strong pipeline...kicking in towards the back half of the year. Our banking and financial services clients are taking a cautious approach and putting some projects on hold.
I don't have a good view as to when that will get resol ved. As of now it's a wait-and-see approach for banking and financial services," D'Souza said during the call. At market opening on Monday, shares of the company were down 7.4% to $54.2.
For the March quarter, Cognizant forecast revenue in the range of $3.18 billion to $3.24 billion, indicating negligible growth on a sequential basis from the De cember quarter.
According to Reuters estimates, analysts on average were expecting Cognizant's March-quarter revenue forecast at $3.32 billion. "There's a fair amount of discretionary spending that kicks in for us during the early part of the year...we are seeing some of that get deferred," said D'Souza.
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For the December quarter, Cognizant posted a 17% growth in profit that marginally came in ahead of expectations and forecast full-year revenue growth between 10-14% for 2016, well below its industry-leading performance in 2015. Software industry lobby Nasscom has predicted 1012% revenue growth for exports for FY17.
Cognizant, which follows a January-December reporting cycle, predicted revenue for 2016 in the range of $13.65 billion to $14.20 billion. For the December quarter, net profit came in at $423.4 million, compared to $362.9 million a year ago. Revenue jumped nearly 18% to $3.23 billion, in line with market expectations.
Cognizant shares closed down 7.7% to $54.05 on Nasdaq on Tuesday.
( Originally published on Feb 08, 2016 )
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