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Cognizant Revenue Beats Estimates as North America Spending Rises

Cognizant Revenue Beats Estimates as North America Spending Rises

By Reuters | Updated: 21 February 2015 12:40 IST

IT services provider Cognizant Technology Solutions Corp's fourth-quarter revenue rose a higher-than-expected 16.4 percent, helped by increased spending by healthcare and financial services customers in North America.

The company also forecast full-year 2015 revenue growth of at least 19 percent, higher than the 16.1 percent achieved in 2014, which was the weakest in the company's 20-year history.

Cognizant's Indian rivals, Tata Consultancy Services and Wipro Ltd have also forecast accelerating growth this year as businesses, especially in North America, start to reinvest in technology to boost efficiency.

Teaneck, New Jersey-based Cognizant, which gets a little over 75 percent of its revenue from North America but has most of its employees in India, forecast full-year revenue of at least $12.21 billion.

The company's revenue rose to $2.74 billion in the quarter ended Dec. 31 from $2.36 billion a year earlier.

Revenue increased 17.4 percent in North America and 10.7 percent in Europe.

Net income rose 11.9 percent to $362.9 million, or 59 cents per share. Excluding items, the company earned 67 cents per share.

Analysts on average had expected a profit of 65 cents per share and revenue of $2.66 billion, according to Thomson Reuters I/B/E/S.

The company's healthcare clients include insurers, hospitals and some state-run exchanges set up under the U.S. Affordable Care Act, also known as Obamacare.

Through Tuesday's close of $55.10, the stock had risen 10 percent since Aug. 6 when the company warned of slowing revenue growth.

© Thomson Reuters 2015

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