Virtusa Q3 net slumps 39 per cent

CHENNAI, INDIA: Virtusa Corporation today reported a 39 per cent dip in net income at $5.3 million for the third quarter ended December 31, 2007, compared to $8.7 million posted for the corresponding quarter previous year.

Virtusa’s revenue for the quarter increased 26 per cent year-on-year to $42.5 million. Virtusa said the decrease in net income was primarily due to a one-time income tax benefit of $5 million in the year ago quarter, caused by the reversal of the company’s deferred tax valuation allowance.

“Our third quarter performance was highlighted by significant operating income growth even in the face of further Indian rupee appreciation,” said Tom Holler, chief financial officer, Virtusa.

“To further mitigate future operating margin volatility associated with potential movement in the Indian rupee, the company has adopted a foreign currency hedge program whereby the company will enter into foreign currency forward contracts on a rolling eight quarter basis.”