Revising down the sales guidance also means that Infosys, which has guided for at-exceptionalthirteen.eight% increase, may additionally develop faster than Cognizant, the primary time in more than13 years.
Bengaluru: Cognizant era answers Corp. on Friday said a sequential decline in revenue inside the quarterto March marking the Nasdaq-listed company’s slowest start to a calendar 12 months due to the fact that2009.
Worryingly for traders, Cognizant slightly revised down its forecast for 2016 revenue increase, with themanagement now expecting full–12 months sales to be between $13.65 billion and $14 billion, an growthof 10-13%, as in opposition to the earlier guidance of 10-14%.
This steerage of at-best thirteen% increase means Cognizant expects the slowest boom on the grounds that its inception in 1996, while the us–based company began serving outside customers after being separated from Dun and Bradstreet.
This additionally approach that Infosys Ltd, which has guided for at-quality thirteen.eight% growth, maygrow faster than Cognizant, the primary time in extra than 13 years.
Cognizant, which has most of its 233,000 personnel based totally in India, said sales inside the threemonths ended 31 March extended 10% from a 12 months earlier, and declined zero.nine% from the fourtharea, to $three.20 billion.
The enterprise closing mentioned a sequential decline of zero.ninety four% within the January-Marchperiod of 2009, a 12 months wherein it still managed to develop at 16.forty two% over the year–agoperiod.
net profits rose to $441.2 million inside the first region from $382.nine million in the year–ago length,stated the enterprise, which follows a January-December accounting 12 months.
Analysts polled via Bloomberg had predicted Cognizant to report January-March zone revenue of $3.22 billion and net earnings of $481.forty million.
The Teaneck, New Jersey-based totally agency estimates revenue to be between $3.34 billion and $3.fourbillion inside the April-June duration—a sequential increase of between 4% and six.25%.
“overall, our first area outcomes were in line with our expectancies and steerage. purchaser call for for our virtual expertise, services and technologies remains robust,” Francisco D’Souza, chief govt officer,said in a statement.
at the center of Cognizant’s soft outlook is the gradual consumer spending amongst global banks and the healthcare space and the agency dropping out on outsourcing offers to some of its opponents, inclusive of Infosys and Tata Consultancy offerings Ltd (TCS).
“We think CTSH (Cognizant) has lost several deals to INFY (Infosys), which is affecting CY16 increase,” Keith Bachman, analyst with BMO Capital Markets, wrote in a notice dated 1 might also.
although, Bachman additionally wrote that Cognizant need to “enhance its boom in CY17 vs. CY16” as the agency can leverage its strong position within the US to win new deals and the modern challenges it faces from healthcare companies maintaining back tech spending must hamper.
India’s largest technology firm, TCS, suggested a 1.five% sequential dollar revenue boom within theJanuary-March period at the same time as Infosys and Wipro Ltd recorded a 1.6% and a pair of.four%upward thrust, respectively. HCL technologies grew at a sequential pace of 1.3%.
Uncertainty over a worldwide financial restoration is making Cognizant’s largest customers, especiallybanks, placed generation spending on preserve. This compelled the agency to go away from its practiceof specifying predicted annual revenue, and rather, Cognizant at the start of this year gave a large revenuegrowth range.
Cognizant’s revised full–year growth of at-great 13% estimate pales in comparison to the sizzling 21%boom recorded final 12 months (2015), whilst Cognizant introduced $2.15 billion in incremental revenueto end the year with sales of $12.forty two billion.
Cognizant did more new business closing yr than the $1.96 billion in new revenues prepare with the aid of India’s three largest software program services organizations—TCS Infosys and Wipro.
