HOME > BUSINESS > Cognizant cuts FY growth guidance to 8.5%-9.0% from 8.5%-9.5%

Cognizant cuts FY growth guidance to 8.5%-9.0% from 8.5%-9.5%

cognizantCognizant, the low-margin, high-growth IT services company, seems to also have fallen prey to the ongoing slowness in the IT outsourcing sector.

The company reported revenue growth of just 2.5% — less than that of Infosys — for the third quarter of this calendar year. Infosys had reported a growth of 3.5% in dollar terms, while TCS had reported an increase of just 0.3%.

More worryingly, its guidance for the next quarter was for a revenue of $3.45 billion to $3.51 billion. Since third quarter revenue was $3.45 bln, this implies a flat to 1.7% growth for the final quarter of the calendar year.

Part of the reason for the conservative guidance could be the seasonal weakness in the holiday quarter, which has fewer workdays.

For the full year, Cognizant now expects revenue growth of just 8.5%-9.0%, less than half the growth seen in 2015, when the top line grew by 21%. Three months earlier, it had guided for revenue growth of 8.5-9.5% for 2016.

Even Infosys, considered a laggard when compared with Cognizant, has a guidance of 8-9% dollar revenue growth for the ongoing year.

THIRD QUARTER

Revenue for the third quarter of 2016 was $3.45 billion, up 8.4% from $3.19 billion in the third quarter of 2015.

Reported net income was $444.4 million compared to $397.2 million in the third quarter of 2015.

Operating margin for the quarter was 16.9%. Excluding the impact of stock-based compensation costs and acquisition-related charges, operating margin for the quarter was 19.3%.

“We see ongoing client demand for our services across industries and geographies,” said Francisco D’Souza, Chief Executive Officer. 

“As the physical and digital worlds converge, we have made it easier for clients to work with us by aligning our organizational structure and capabilities around the broader focus of assisting clients drive digital transformations. Our new President, Raj Mehta, who has been a key member of our senior leadership team for two decades, and the broader team of executives are leading our strategic initiatives. They have a proven track record of innovation, execution and an unwavering focus on client service and satisfaction.”

“Third quarter revenue was within, and non-GAAP EPS was slightly above, our guided range, indicating that we continue to execute well on our stated strategy,” said Karen McLoughlin, Chief Financial Officer. “Our solid performance was also reflected in another strong quarter of cash flow generation as cash and investments, net of debt increased by $390 million.”

Fourth quarter 2016 non-GAAP diluted EPS is expected to be in the range of $0.85 to $0.88.

Follow ULTRA.news
Bharti Airtel Q1 revenue up 10%, profit down 12% Tower provider Bharti Infratel reported a 10% growth in its revenue and profit for the first quarter.The Consolidated revenues for the quarter, at Rs. 3,524 Crore, was up by 10% over the corresponding period last year.Consolidated profit from operations improved to Rs 1,...
ACC net profit up 33%, sales up 18%, volume rises 10% Cement manufacturer ACC Ltd reported a 46% jump in profit before tax to Rs 482 Cr, while sales increased 18% in the first quarter to 3,329 Cr.Net profit rose 33% to 326 cr.Cement volume rose 10% on year."The Company delivered strong volume growth amidst challenging ma...
Wipro opens Artificial Intelligence research facility in Israel University IT and outsourcing services provider Wipro said it will use students at Israel's largest university to jointly conduct research into artificial intelligence.The company inked an agreement with Tel Aviv University, Israel's largest institution of higher learning which is home ...
IT woes to bring down real estate rentals in Bangalore, IT hubs With IT sector witnessing subdued sentiment amidst pressure on hiring and annual pay rise for employees, the country's software and services hubs such as Bengaluru, Hyderabad, Chennai, Pune and Noida-Gurgaon in NCR are expected to see 10-20 per cent reduction in the housing rents...
TCS to create apps on Siemen’s IoT platform MindSphere Tata Consultancy Services said it will create applications on MindSphere, the cloud-based, open IoT operating system from Siemens.TCS CEO Rajesh GopinathanIoT stands for 'Internet of Things' and refers to connectivity between two machines over the Internet, with zero h...
Jet Airways posts profit of Rs 23 cr for Q4 Jet Airways Group today announced its second successive profitable year for the year ended Mar. 31, 2017.For Q4 of FY17, the group reported a net profit of INR 23 crores. The Group reported a consolidated profit of INR 438 crores for the year. "Despite the challenges po...
Larsen & Toubro reports 12% increase in sales, 30% in profit Larsen & Toubro recorded revenue of Rs 36,828 crore for the final quarter of the financial year, recording an increase of 12% on a y-o-y basis.The overall PAT for the quarter January to March 2017 stood at Rs 3,025 crore higher by 29.5%, as compared to Rs 2,335 crore reco...
IGL profit up 23% in fourth quarter, sales up 13% Indraprastha Gas Limited, the supplier of Compressed Natural Gas and Piped Natural Gas in the National Capital Territory of Delhi, Noida, Greater Noida & Ghaziabad today announced its Q4 results.The company’s net profit for the three months ended March increased from Rs. ...
Tech Mahindra net profit down 31% due to rupee, poor growth Tech Mahindra said its revenue fell 0.8% quarter on quarter in the three months ended March to Rs 7,495 crore, while net profit fell 31% to Rs 588 cr.In dollar terms, revenue rose 1.3% quarter on quarter and in constant currency terms, it was up 0.9% QoQ.In dollar ter...
SpiceJet introduces self check-in for baggage in Mumbai SpiceJet has introduced self check-in for baggage at Mumbai’s Chhatrapati Shivaji domestic airport.Customers flying with SpiceJet can now simply check-in their baggage at the self-service kiosks themselves up to 45 minutes prior to the departure time."Independent of...
Bharti Airtel is successfully adopting the Reliance Jio model It is not every day that a new entrant forces the established players in the market to overhaul their business models. But Reliance Jio seems to be doing just that, and rivals like Bharti Airtel are proving to be quick, if slightly unwilling, learners.In the three months from...
Cognizant says will layoff employees, close facilities this year Cognizant, one of the largest employers in India, said it will let go off some of its employees and shut down some of its facilities as part of its ongoing shift away from traditional outsourcing to 'digital transformation work'.The company said it is 'accelerating its shift...
Cognizant layoffs may be heading to TN labour courts as FITE preps petitions Forum for IT Employees or FITE -- an organization that claims to speak for ordinary IT workers -- said a group of employees of Cognizant Technology Solutions will approach the office of Labour Commissioner of Chennai today."Affected CTS employees file petition to the Labour ...
Wipro rebrands itself, reveals new logo Outsourced services provider Wipro Ltd said it was undergoing a rebranding to reflect its evolving business."The new brand identity signifies a higher level of engagement and brand permission that helps clients leverage Wipro’s expertise to address their business requirement...
Vitara Brezza lifts Maruti Suzuki’s fortunes in FY17 New Maruti Suzuki Dzire 2017 model to be launched next monthMaruti Suzuki said its revenue increased 20.3% in the three months from January to March this year compared to the same quarter last year, while net profit jumped 16%."Growth in volumes, increase in share of the...
Wipro refuses to reveal how many employees are being laid off Wipro Ltd, one of India's top employers, refused to confirm the exact number of people that it was laying off as part of its annual appraisal process."It is part of the internal appraisal process," company officials said, refusing to go into further details.The media ha...
After Cognizant, Wipro employees on edge as annual appraisal starts India IT growth: Nasscom Strategic Review 2016Employees of Wipro Ltd are nervous as the information technology giant has kicked off its annual appraisal process this month.The first of the several reviews, known as L1 or level 1, has been completed, and at least some emp...
WATCH LIVE – Moving towards a less visa-dependent model : TCS New TCS CEO Rajesh GopinathanTata Consultancy Services has reported Q4 revenue of Rs 29,642 cr, a decline of 0.3%, and said his company will wait and see about new US visa regulations that are scheduled to come out today.NEW VISA RULESOn new visa regulations expected...
Infosys guides for FY18 growth of 6.5-8.5% in constant currency Infosys Q4 resultsInfosys Ltd said it expects its revenue to grow by a modest 6.5-8.5%, stripped off the impact of currency movements, in the year that started this month.The street was expecting a guidance of 7-9% growth.The guidance is well below the traditional gu...
FITE urges Cognizant employees not to submit resignations FITE rose to prominence protesting layoffs at TCSForum for IT Employees or FITE, a web-based IT workers' collective, has urged employees of Cognizant Technology Solutions not to resign voluntarily if asked by the company's human resources department."If the employee resi...
Reliance Jio carries 80% of traffic on next-gen Internet technology IPv6 roll-out on Jio. source:APNICReliance Jio, the new entrant to India's telecom landscape, is carrying nearly 80% of its traffic in the next-generation Internet technology, a senior official of the company said.Internet Protocol or IP is one of the languages used by machi...
Wipro reports poor third-quarter, outlook for 1-2% growth Wipro Ltd has reported poor third quarter results.The highlights are as follows.Gross Revenues were 136.9 billion ($2 billion), an increase of 6.4% YoY.Net Income was 21.1 billion, a decrease of 5.7% year on year.Both numbers are below market expectations. ...
Tech Mahindra opens robotics, AI and digital services center in Dublin IT services provider Tech Mahindra opened a new facility in Dublin, Ireland to focus on emerging technologies such as Robotics and Automation, Business Analytics, Cloud Infrastructure and Digital Services.The new centre would employ around 150 engineers over the next three ye...
TRUMP THREAT: TCS not worried, says we’re not the villains source: NasscomTata Consultancy Services, the largest Indian-owned outsourcing company, said it is able to manage with 75% less new visas this year as it has changed its business and recruitment models in recent years. It also said that outsourcing was key to protecting US j...
N Ganapathy Subramaniam appointed new TCS COO COO N Ganapathy SubramanianTata Consultancy Services said it made two appointments in the wake of the departure of Chief Executive officer N Chandrasekaran: N. Ganapathy Subramaniam, elder brother of outgoing CEO Chandrasekaran, has been appointed as the chief operating offi...