Cognizant Technology Solutions Corporation (CTSH) reported revenues of $1.105 billion in the second quarter of 2010, up 42% year over year and up 15% sequentially, and exceeding the Zacks Consensus Estimate of $1.018 billion.
Operating margin came in at 18.6%. Excluding stock-based compensation expenses of $13.9 million, operating margin came in at 19.9%, slightly down from 20.5% reported in the previous quarter, but within management's targeted range of 19-20%.
Net income came in at $172.2 million or 56 cents per share, compared to net income of $151.5 million or 49 cents in the previous quarter and a net income of $141.3 million or 47 cents in the year-earlier quarter. This beat the Zacks Consensus Estimate of 52 cents.
Excluding stock-based compensation expenses and applicable stock-based Indian fringe benefit tax expenses, earnings per share (EPS) came in at 59 cents, compared to 50 cents in the year-earlier quarter.
The solid performance in the quarter was driven by strong client spending across all business segments and geographies. The clients are investing again in discretionary programs to boost growth after the lull of 2009. In particular, Cognizant saw particular strength in the financial services segment, which was deeply adversely impacted by the economic downturn.
Going forward, management expects revenues of at least $1.175 million in the third quarter of 2010. EPS is projected at 59 cents. Excluding stock-based compensation expense, EPS is forecasted at 63 cents. In 2009, Cognizant made significant investments in new areas, including consulting and emerging markets, new solutions such as enterprise analytics, and new technologies such as cloud and mobile computing. These efforts should continue to drive growth in the coming quarters.
Based on a strong first half, Cognizant upgraded its guidance for 2010. Cognizant now expects revenues of at least $4.46 billion in 2010, up from the previous estimate of $4.1 billion, and an increase of 36% from 2009. EPS is likely to be at least $2.26, up from the previous estimate of $2.10. Excluding $0.16 of estimated stock-based compensation expense, EPS is forecasted at $2.42, up from the earlier forecast of $2.26.
The global economic scenario is showing signs of recovery, and the business environment has become more stable compared to year-end 2009. IT spending is expected to get a boost in 2010, and Cognizant expects to win significant business.
Headquartered in Teaneck, New Jersey, Cognizant is a leading provider of custom information technology to Fortune 1000 customers. The company competes with Infosys Technologies Ltd. (INFY) and Wipro Limited (WIT) in this space.
COGNIZANT TECH (CTSH): Free Stock Analysis Report
INFOSYS TEC-ADR (INFY): Free Stock Analysis Report
WIPRO LTD-ADR (WIT): Free Stock Analysis Report
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Net income came in at $172.2 million or 56 cents per share, compared to net income of $151.5 million or 49 cents in the previous quarter and a net income of $141.3 million or 47 cents in the year-earlier quarter. This beat the Zacks Consensus Estimate of 52 cents.
Excluding stock-based compensation expenses and applicable stock-based Indian fringe benefit tax expenses, earnings per share (EPS) came in at 59 cents, compared to 50 cents in the year-earlier quarter.
The solid performance in the quarter was driven by strong client spending across all business segments and geographies. The clients are investing again in discretionary programs to boost growth after the lull of 2009. In particular, Cognizant saw particular strength in the financial services segment, which was deeply adversely impacted by the economic downturn.
Going forward, management expects revenues of at least $1.175 million in the third quarter of 2010. EPS is projected at 59 cents. Excluding stock-based compensation expense, EPS is forecasted at 63 cents. In 2009, Cognizant made significant investments in new areas, including consulting and emerging markets, new solutions such as enterprise analytics, and new technologies such as cloud and mobile computing. These efforts should continue to drive growth in the coming quarters.
Based on a strong first half, Cognizant upgraded its guidance for 2010. Cognizant now expects revenues of at least $4.46 billion in 2010, up from the previous estimate of $4.1 billion, and an increase of 36% from 2009. EPS is likely to be at least $2.26, up from the previous estimate of $2.10. Excluding $0.16 of estimated stock-based compensation expense, EPS is forecasted at $2.42, up from the earlier forecast of $2.26.
The global economic scenario is showing signs of recovery, and the business environment has become more stable compared to year-end 2009. IT spending is expected to get a boost in 2010, and Cognizant expects to win significant business.
Headquartered in Teaneck, New Jersey, Cognizant is a leading provider of custom information technology to Fortune 1000 customers. The company competes with Infosys Technologies Ltd. (INFY) and Wipro Limited (WIT) in this space.
COGNIZANT TECH (CTSH): Free Stock Analysis Report
INFOSYS TEC-ADR (INFY): Free Stock Analysis Report
WIPRO LTD-ADR (WIT): Free Stock Analysis Report
Zacks Investment Research
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