Cognizant Earns 80 Cents per Share

We got our final Buy List earnings report this morning. Cognizant Technology Solutions (CTSH) reported first-quarter earnings of 80 cents per share. That was one penny more than Wall Street’s consensus. Cognizant had said it was expecting earnings between 78 and 80 cents per share. The company earned 71 cents per share in last year’s Q1. Quarterly revenue rose 10% to $3.2 billion.

“Overall, our first quarter results were in line with our expectations and guidance. Client demand for our digital expertise, services and technologies remains strong,” said Francisco D’Souza, Chief Executive Officer. “We continue to see positive returns from our extensive strategic investment in disruptive technologies, new digital business models and best-in-class delivery capabilities. We believe our strong fundamentals have positioned us well to be the transformation partner of choice for our clients.”

“As anticipated, during the first quarter we saw softness in our healthcare segment due to M&A activity, as well as softness in our banking segment due to financial market volatility,” said Gordon Coburn, President. “As we move into the second quarter, we are quite pleased with our momentum with new and existing clients, which we expect to drive sequential revenue growth in the second quarter of $140 to $200 million. To support this expected growth, we significantly accelerated hiring during the first quarter and increased our global headcount by 11,300 employees.”

Now for guidance. For Q2, Cognizant said they expect earnings of 80 to 82 cents per share. Wall Street had been expecting 84 cents per share. They reiterated their full-year guidance of $3.32 to $3.44 per share.

On the sales side, they see Q2 coming in between $3.34 billion and $3.40 billion. For the whole year, Cognizant expects revenue between $13.65 billion and $14.0 billion. They lowered the high end of their full-year guidance by $200 million.

“Based on first quarter results and our visibility on deals ramping up throughout the year, we have tightened our 2016 revenue guidance range to $13.65-$14.0 billion, representing approximately 10-13% growth year-over-year,” said Karen McLoughlin, Chief Financial Officer. “Our balance sheet and cash position remain healthy. We repurchased 4.3 million shares in the first quarter at a total cost of $244.6 million, reflecting confidence in the strength of our business and our commitment to drive shareholder value.”

Posted by on May 6th, 2016 at 7:27 am


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