Nasdaq-listed Cognizant Technology Solutions continues its good show during the fourth quarter as well after having reported strong performances during the first three quarters of the financial year ending December 2010, giving enough indications that it is well on course to become India’s third largest IT services provider replacing the incumbent Wipro to the fourth spot in the league table.
The company’s revenues during the December quarter surged 45.2% y-o-y to $1.31 billion compared to $902.7 million in the same quarter of the previous fiscal year while the net income grew equally impressively by 43.2% to $206.2 million ($0.66 per diluted share) against $144.0 million ($0.47 per diluted share), during the same period. The company’s GAAP operating margin for the quarter stood at 18.7%. The company also net added over 8,300 employees which took its total headcount to approximately 104,000, as of December 2010.
The company’s revenue for FY’10 too was up 40.1% to $4.59 ($2.37 per diluted share) from $535.0 million ($1.78 per diluted share), during the same period.
Francisco D'Souza, President and Chief Executive Officer, Cognizant, said, “Clients increasingly turn to us as they look to outsource a broader range of services and simultaneously address the secular and technological shifts impacting their industries.” Expecting to sustain the company’s growth momentum, he added, “We believe that these trends, and our resilience in meeting them, should provide strong support for growth as we enter 2011.”
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||
(In thousands, except per share amounts) | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
December 31, | December 31, | |||||||
2010 | 2009 | 2010 | 2009 | |||||
Revenues | $ 1,310,602 | $ 902,721 | $ 4,592,389 | $ 3,278,663 | ||||
Operating expenses: | ||||||||
Cost of revenues (exclusive of depreciation and amortization expense shown separately below) | 758,023 | 520,796 | 2,654,569 | 1,849,443 | ||||
Selling, general and administrative expenses | 279,921 | 190,678 | 972,093 | 721,359 | ||||
Depreciation and amortization expense | 28,037 | 24,339 | 103,875 | 89,371 | ||||
Income from operations | 244,621 | 166,908 | 861,852 | 618,490 | ||||
Other income (expense), net: | ||||||||
Interest income | 6,139 | 6,139 | 25,793 | 15,895 | ||||
Other, net | (2,216) | (4,450) | (9,065) | 2,566 | ||||
Total other income (expense), net | 3,923 | 1,689 | 16,728 | 18,461 | ||||
Income before provision for income taxes | 248,544 | 168,597 | 878,580 | 636,951 | ||||
Provision for income taxes | 42,378 | 24,593 | 145,040 | 101,988 | ||||
Net income | $ 206,166 | $ 144,004 | $ 733,540 | $ 534,963 | ||||
Basic earnings per share | $ 0.68 | $ 0.49 | $ 2.44 | $ 1.82 | ||||
Diluted earnings per share | $ 0.66 | $ 0.47 | $ 2.37 | $ 1.78 | ||||
Weighted average number of common | ||||||||
shares outstanding - Basic | 303,631 | 295,602 | 300,781 | 293,304 | ||||
Weighted average number of common | ||||||||
shares outstanding - Diluted | 311,776 | 304,615 | 309,137 | 301,115 | ||||
In our earlier report we’d expected the company to maintain the growth rate of about 40% in its top line so as to jump ahead of Wipro by the March quarter of 2011. The latest report further vindicates that. To read the said report visit: http://businessviewsreviews.blogspot.com/2011/01/stories-abound-about-how-cognizant-is.html
The company in its guidance has said that it expects the first quarter 2011 revenue to be at least $1.36 billion i.e., a sequential growth of about 3.82%. Revenues for the FY’11 is expected to be at least $5.79 billion, up at least 26% compared to 2010, a press release from the company said.
The guidance given by the company seems to be slightly conservative. Nevertheless, Wipro, which has initiated major overhauls including replacement of its dual-CEO structure with that of a single CEO and restructuring of its IT businesses post-its disappointing results during the just concluded December quarter, can ill-afford to relax.
Maybe the much hyped duel between two of India’s most accomplished information technology companies can only do loads of good to them, enabling them to compete well with their bigger global, and also domestic, rivals.
Who says competition is bad. At least we’re not saying that.
Amy, Chief Editor
You can contact the author at: chiefeditor@addonviews.com
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