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IGate Q1 profit misses on lower client spending

IGate Q1 profit misses on lower client spending
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First Published: Thu, May 05 2011. 04 31 PM IST
Updated: Thu, May 05 2011. 04 31 PM IST
Bangalore: Software company iGate’s posted first-quarter results that missed Wall Street expectations, hurt in part by lower customer spending.
IGates’ results follow a disappointing annual sales forecast by Infosys Technologies Ltd, India’s No. 2 software services exporter, on slower client spending.
“Delays in clients’ budgets created softness in the market, which was further exacerbated by our focus on the Patni acquisition creating a sequentially weak quarter for iGate,” chief executive Phaneesh Murthy said in a statement.
Fremont, California-based iGate, backed by private-equity firm Apax Partners, in January acquired a majority stake in Patni Computer Systems for $1.2 billion in one of the largest deals in India’s technology sector.
“The process of acquiring Patni Computer Systems is on track and we expect the transaction to be completed shortly,” chief financial officer Sujit Sircar said.
January-March earnings stood at $17.9 million, or 22 cents a share, compared with $11.6 million, or 20 cents a share, last year. Excluding items, it earned 23 cents a share. Sales jumped 31% to $75.8 million.
Analysts, on average, were looking for earnings of 27 cents a share on revenue of $78.3 million, according to Thomson Reuters I/B/E/S.
The company’s shares, which have shed 11% of their value since it announced its Patni buy, closed at $16.81 on Wednesday on Nasdaq.
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First Published: Thu, May 05 2011. 04 31 PM IST
More Topics: Company results | iGate | Q1 | Profit | Clients |