India's second largest IT exporter Cognizant Technology Solutions Corporation reported March quarter results that were broadly in line with analyst expectations. The company continues to outpace many of its top-tier peers in revenue growth.
Cognizant's net income came in at $348.9 million, or $0.57 per diluted share. First quarter revenues totaled $2.42 billion, up 2.8 per cent over the previous quarter - a touch below average Street estimates of $2.43 billion. Cognizant's growth, nevertheless, was comparable to HCL Technologies (3 per cent) and higher than TCS (1.9 per cent), Infosys (0.4 per cent de-growth) and Wipro (2.5 per cent).
Cognizant's revenues were driven by industries such as financial services, manufacturing, and retail. While growth in North America was muted, it was offset by 9.6 per cent sequential growth in Europe - the United Kingdom hit the billion dollar revenue run rate for the first time.
The company added 7,200 people on a net basis, one of the highest additions the company made in recent quarters, and a pointer to the management's confidence in the year ahead. The company has guided revenues of $10.3 billion for 2014, a growth of 16.5 per cent over 2013 - higher than industry lobby Nasscom's average estimates of 13 per cent. The annual growth guidance implies that Cognizant would widen its gap with Infosys in the Indian IT pecking order. Infosys said it could grow nine per cent at the higher end of its guidance.
For the June quarter, Cognizant expects revenues between $2.50 billion and $2.53 billion, or a sequential growth of 3.2 to 4.5 per cent.
"We remain confident in the overall demand environment and in our ability to deliver our previously stated revenue guidance," Gordon Coburn, President of the company noted in a media statement. "Our strategy of re-investing in our business to build strength across all of our growth horizons is clearly paying off. As the impact of digital technologies increasingly becomes a CEO level agenda item, Cognizant is well positioned to capitalize on this trend."