Cognizant Posts Upbeat Q1 Results, Lifts Forecast

reported better-than-expected results for its first quarter and raised its outlook for the year. For the year, the company now projects adjusted profit of at least $2.93 per share, on revenue of at least $12.24 billion. Cognizant had earlier expected a profit of $2.91 per share on revenue of $12.21 billion. Analysts had expected a profit of $2.95 per share on revenue of $12.29 billion. For the current quarter, the company projects adjusted profit of at least $0.72 per share, on sales of at least $3.01 billion. Analysts had projected $0.73 per share on revenue of $3 billion. The Teaneck, New Jersey-based company reported a quarterly profit of $382.9 million, or $0.62 per share, versus a year-ago profit of $348.9 million, or $0.57 per share. Excluding items, the company's earnings climbed to $0.71 per share from $0.62 per share. Its revenue surged 20.2 percent year-over-year to $2.91 billion. However, analysts were expecting a profit of $0.70 per share on revenue of $2.89 billion. The average estimate among 13 Estimize users was for earnings of $0.70 per share and revenue of $2.90 billion. North American sales climbed 25 percent in the quarter, while sales from Europe, excluding the U.K., declined 0.9 percent. Its revenue from its healthcare business climbed 43 percent to $879.1 million in the quarter, while revenue from its financial services unit rose 13.4 percent to $1.16 billion. Manufacturing and logistics revenue surged 7.2 percent to $548.9 million in the quarter. GAAP operating margin was 17.2 percent for the quarter, while non-GAAP operating margin came in at 19.8 percent. "The clients we serve are experiencing tremendous change in their businesses and are increasingly turning to Cognizant to navigate that change," said Francisco D'Souza, Chief Executive Officer of Cognizant. "The investments we have made in digital, automation, utility-based delivery models, consulting and industry-specific expertise are clearly paying off. Given how fast the landscape is changing, clients typically don't have the skillsets to manage this transformation in-house and are turning to Cognizant to help them re-architect their core business and organizational models. As a result, we're building deeper relationships with CEOs and boards, CIOs, and business and functional leaders to help them transform their businesses into digital enterprises." Cognizant shares gained 1.02 percent to close at $59.14 on Friday.