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S&P 500 (NYSE:SPY) component Cognizant Technology Solutions Corporation (NASDAQ:CTSH) reported higher profit for the second quarter as revenue showed growth. Cognizant Technology Solutions provides custom IT consulting and technology services as well as outsourcing services for companies in North America, Europe, and Asia.
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Cognizant Technology Solutions Corporation Earnings Cheat Sheet
Results: Net income for Cognizant Technology Solutions Corporation rose to $251.9 million (82 cents per share) vs. $208 million (67 cents per share) in the same quarter a year earlier. This marks a rise of 21.1% from the year-earlier quarter.
Revenue: Rose 20.9% to $1.8 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Cognizant Technology Solutions Corporation beat the mean analyst estimate of 81 cents per share. It beat the average revenue estimate of $1.71 billion.
Quoting Management: “Clients continue to turn to Cognizant to help reinvent their business models in the face of secular industry changes, evolving demographics, and a new stack of social, mobile, analytics, and cloud technologies,” said Francisco D’Souza, Chief Executive Officer. “We are well positioned to capitalize on these opportunities due to our unique combination of management consulting and operational capabilities in areas such as large scale program management and change management. With our robust global delivery model, we make the complexities of managing large scale transformation programs seamless and transparent to our clients.”
For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 27.7%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 34.4% from the year earlier quarter.
The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 17% and in the fourth quarter of the last fiscal year, the figure rose 16.5%.
The company beat estimates last quarter after meeting expectations in the first quarter with net income of 79 cents per share.
Last quarter, gross margins grew by 0.5 percentage point from the year-earlier quarter to 42.6%. This snaps a streak of two consecutive quarters of shrinking margins.
Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 86 cents per share, down from 89 cents ninety days ago. At $3.36 per share, the average estimate for the fiscal year has fallen from $3.45 ninety days ago.
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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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