Cognizant Q2 net profit beats raised hopes

TEANECK, N.J.: Cognizant Technology Solutions Corporation on Monday posted a second-quarter profit that swelled past recently raised expectations, propelled by hot demand for software services done from India. Net income for the second-quarter rose to $8.6 million, or 41 cents per diluted share compared with $5.8 million, or 29 cents a share in the year-ago second quarter. Operating margins edged up to 19.7 percent from 19.5 percent in first quarter.

The consensus among 15 analysts surveyed by market researcher Thomson First Call was for Cognizant to report a profit of 36 cents per share. The latest results well exceeded the range of estimates that started at 36 cents at the low-end and rose to 38 cents on the high-end of analyst forecasts.

Revenue for the second quarter rose to $54.4 million, up 20 percent from $45.4 million in the same quarter of 2001. Revenue estimates ranged between $49 million to $51 million with a consensus of around $49.7 million.

In contrast to many technology companies, Cognizant had guided investors to expect higher revenues half-way through the second quarter. The company, a 1998 spin-off of D&B, is benefiting from surging demand by U.S. financial service, insurance and health care companies for competitively priced offshore software development performed in India.

(C) Reuters Ltd.