IT majors Q4 results

Cognizant trims full-year revenue growth estimate

Cognizant Technology Solutions Corp. on Monday slashed its 2012 revenue growth forecast by 3 percentage points, citing less-than-expected demand for computer services, in one more worrying signal to an industry that’s already been fretting about reduced client budgets in the US and Europe.

The last time Cognizant had to cut its full-year outlook was in 2008 at the height of the global financial crisis.

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Cognizant guidance revision underlines slowdown in IT

In 2011, Cognizant Technology Solutions Corp. had predicted 26% growth in revenue and ended up growing 33%. In 2010, the firm estimated 20% growth, but expanded by over 40%.

Still, hardly any analyst was expecting an outperformance in 2012 because the company needed to grow revenue at a steep rate of 6.8% sequentially in the June, September and December quarters to meet its 2012 target. Having said that, given Cognizant’s track record in meeting its own estimates, hardly anyone was expecting the company to miss the target either.

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Karen Mcloughlin | Trimmed outlook should hold

Nasdaq-listed Cognizant Technology Solutions Corp. on Monday cut its full-year revenue growth forecast for the first time in four years. The company’s chief financial officer Karen McLoughlin spoke in a phone interview after the announcement. Edited excerpts:

You’ve cut your full-year forecast, which means things aren’t going as planned. When did you start seeing the downtrend?

We saw it coming out of the first quarter. Typically, March and April are big bellwethers in terms of how the year will play out. That’s when we see acceleration in demand. We didn’t see that kind of strong growth.

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Wipro earnings, guidance disappoint investors

Bangalore: Wipro Ltd’s IT (information technology) services business, belying expectations of beating the upper end of its revenue forecast and delivering growth above its peers, grew 2% sequentially for the March quarter to $1.54 billion (Rs. 8,085 crore today) which, along with a negative-to-muted growth guidance for the first quarter of fiscal 2013 (FY13), sent the stock tumbling by 7.3%.

IT business chief executive officer T.K. Kurien attributed the underperformance to delays in deal closures during the quarter, and a decline in business from one of its largest customers.

As for the disappointing forecast for the first quarter of fiscal 2013, which pegged revenue between $1.52 billion and $1.55 billion, a slowdown was also expected in its India business, which had grown well in the fourth quarter, in addition to further delays in deal closures, he said.

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Wipro results show all isn’t well with Indian IT sector

In the past six months, Wipro Ltd’s shares had outperformed the CNX IT index by 25%, thanks to better-than-expected results in the September and December quarters, and the hope that it would catch up with the growth rate of its peers by the March quarter. But Wipro’s disappointing March quarter results and its weak guidance for the June quarter have just poured cold water on these hopes.

Wipro’s volumes grew by just 0.8% in the March quarter and revenue in dollar terms was only marginally ahead of the lower end of its guidance. Adjusted for cross-currency movements, the company’s guidance range was between $1.53 billion and $1.56 billion. It reported revenue of $1.54 billion. In the preceding two quarters, the company had beaten the higher end of its guidance by a decent margin. On a year-on-year (y-o-y) basis, growth was only 9.7%.

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TCS profit up 23%, revenue tops $10 bn

The country’s largest information technology (IT) services provider, Tata Consultancy Services Ltd (TCS), became the first Indian IT company to cross the $10 billion mark in annual revenue, even as it posted results in line with market expectations for the March quarter.

TCS posted a net profit of Rs. 2,932 crore, up 22.6% year-on-year and 1.6% compared with the trailing quarter. Revenue grew 30.5% from a year ago to Rs. 13,259 crore, but a mere 0.4% from the preceding quarter, according to International Financial Reporting Standards.

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TCS tops muted estimates

Tata Consultancy Services Ltd (TCS) has come back with a bang after reporting lower growth compared with even Infosys Ltd in the December quarter. In the March quarter, its revenue grew 2.4% in dollar terms to $2.65 billion, higher than most analysts’ estimates. In comparison, Infosys reported a 1.9% drop in revenue to $1.77 billion.

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HCL Tech exceeds expectations, records 29% jump in net profit

The results were of HCL Technologies Ltd and the numbers looked good, but the message analysts saw in them had more to do with Infosys Ltd, which declared its numbers last week, and not HCL.

HCL exceeded market expectations to report a 28.7% jump in net profit for the three months ended 31 March, compared with the same period last year, news that was welcomed by investors with the company’s shares running up 6.31% on BSE before closing 3.06% higher at Rs. 495.55 each on a day when the exchange’s benchmark index stayed flat.

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HCL Tech’s results may not dispel concerns about the sector

HCL Technologies Ltd’s March quarter earnings reinforced the belief held by a large section of the Street that Infosys Ltd’s problems are company specific. HCL Tech reported a 1.9% sequential growth in revenue in constant currency terms, against a 2.1% sequential drop in the case of Infosys.

The company’s post-earnings commentary was positive, too. Not surprisingly, its shares rose 2.8% after the results—HCL Tech’s shares are now at the same level as they were prior to the earnings announcement by Infosys, whose shares are down nearly 14%. Shares of Tata Consultancy Services Ltd (TCS), Cognizant Technology Solutions Corp. and Wipro Ltd are down around 3% since Infosys’s announcement.

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Infosys misses forecast, shares tumble

India’s second largest computer services firm, Infosys Ltd, on Friday forecast fiscal 2013 revenue growth that fell short of analyst and investor expectations, causing its shares to post their biggest single-day decline in almost three years.

The Bangalore-based firm also missed achieving its annual forecast for the first time with revenue growth of 15.8% in the year ended 31 March. Infosys had predicted 16.3% growth in the year, after downgrading its forecast twice. In the last quarter of the fiscal, revenue and profit declined on a sequential basis.

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Infosys investors have a lot to worry about

Infosys Ltd’s results for the quarter ended March are shocking. It appears, prima facie, that investors are most upset about the modest 8-10% revenue growth guidance for the year till March 2013. This column (What will be Infosys’s forecast?) had pointed out two days ago that the lower end of the company’s guidance is likely to be in single digits, and that it could lead to a sharp drop in the company’s shares.

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