Cognizant Q1 profit tops Street, sees strong Q2

BANGALORE: IT services provider Cognizant Technology Solutions Corp posted a better-than-expected quarterly profit and forecast strong second-quarter sales as it continues to benefit from strong demand.

First-quarter results of the company, which gets more than 40 per cent of its revenue from the financial services segment, were in contrast to the disappointing sales growth reported by rival Infosys Technologies earlier this month.

Cognizant, whose rivals include Tata Consultancy Services , remains confident of maintaining adjusted operating margins within a targeted range of 19-20 per cent, Chief Financial Officer Gordon Coburn said in a statement.

For the April-June quarter, the company forecast adjusted earnings of 70 cents a share on sales of $1.45 billion. The forecast excluded 5 cents in estimated stock-based compensation expense, the company said.

Analysts, on average, were looking for earnings of 66 cents a share, on sales of $1.44 billion, according to Thomson Reuters I/B/E/S.

For the first quarter, the company earned $208.3 million, or 67 cents a share, up from $151.5 million, or 49 cents a share, last year.

Excluding items, it earned 67 cents a share, beating analysts' estimates 63 cents a share, according to Thomson Reuters I/B/E/S.

Revenue grew 43 percent to $1.37 billion, in line with estimates.

Cognizant shares, which have risen nearly 60 percent over the last year, closed at $82.21 on Monday on Nasdaq