Wipro Matches Estimates - Analyst Blog

Wipro Ltd. (WIT) reported earnings per share from continuing operations of 12 cents in the third quarter of 2011 matching the Zacks Consensus Estimate. Total revenue in the quarter was Rs.78.29 billion ($1.75 billion), up 12% over the corresponding prior-year period.

IT Services segment derived 76% of total revenue and 92% of operating income in the quarter.

Application Development and Maintenance revenues constituted 40.3% of the segment followed by Technology Infrastructure Services at 21.4%, Package Implementation at 13.2%, Testing Services at 11.0% and BPO unit at 9.3%. Financial Services and Technology, Media & Telecom were the top two verticals accounting for 27.3% and 24.5% of segment revenues, respectively in the quarter.

A total of 36 new clients were acquired in the quarter, taking the total number of active customers to 880. The top customer accounted for 3% of total revenue, up by 10 basis points sequentially. Revenue concentration of top 10 customers remained steady at 19.2% in the reported quarter.

The Americas accounted for 54.2% of revenues followed by Europe (28.3%), India and Middle East (8.9%) and APAC and other emerging countries (7.1%).

Voluntary annualized rate of attrition increased steeply to 21.6% from 19.4% at the end of the prior quarter. Net utilization, excluding trainees, dropped to 79.9% in the quarter from 82.4% in the prior quarter. There was a net addition of 3,591 employees in the quarter.

 IT Products segment revenues were 11% of quarterly revenues and declined 13% year over year. Operating margin for the segment was 4.6% in the quarter.
 
The return on capital employed for IT Services and Products segments combined was 39% on an annualized basis for the most recent quarter.
 
Consumer Care and Lighting revenues were 9% of total revenues and increased 21% year over year. Operating margin for the segment was 12.3%.

Guidance
 
The company expects revenue from its IT Services business to be between $1.38 billion and $1.41 billion for the fourth quarter of 2011.

Wipro Limited provides information technology (IT) services and products, and consumer care and lighting products worldwide. The company's IT Services segment provides IT and IT enabled services, including IT consulting, custom application design, development, re-engineering and maintenance, systems integration, package implementation, technology infrastructure outsourcing, BPO services, and research and development services in the areas of hardware and software design.

Recently, its competitor Infosys Technologies Ltd (INFY) reported third quarter 2011 earnings of 69 cents per share, beating the Zacks Consensus Estimate of 66 cents.

 
INFOSYS TEC-ADR (INFY): Free Stock Analysis Report
 
WIPRO LTD-ADR (WIT): Free Stock Analysis Report
 
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