Syntel Q1 EPS Misses Estimations, Offers Tepid Outlook

Syntel, Inc. SYNT net income advanced 32.75 percent to $53.1 million in the first quarter from $40 million while earnings grew 31.25 percent to $0.63 a share from $0.48 a share in the year-ago quarter. This was lower than the Street analysts' estimations of $0.66 a share.

Syntel said its revenues advanced 9.4 percent to $241.4 million from $220.6 million in the previous year quarter. It was also lower than the Street analysts' predictions of $245.64 million.

President and CEO Nitin Rakesh said, "Our customers remain focused on transforming their businesses, however, the market volatility seen during the first quarter led to elongated decision cycles on full-year budgets. There is a clear need for partners who can help companies execute strategic initiatives while also managing the cost of ownership of IT investments across their organizations. Syntel's capabilities in digital enablement and modernization and our SyntBots recursive automation platform are helping customers strike the right balance between these competing priorities."

Rakesh added, "On the strength of our offerings, we expanded our footprint with strategic customers last quarter and identified additional ways to build on these critical relationships. Syntel's ongoing investments in domain-centric capabilities underscore our commitment to the long-term success of our customers. While growth in our insurance industry group remained weak this quarter, the health of the underlying pipeline continues to give us confidence that this segment will begin to recover in a few quarters."

Moving ahead, Syntel expects earnings of $2.55-$2.80 a share on revenue forecast of $1.01-$1.04 billion. The mid-point is lower than the Street expectations of $2.91 a share on revenue of $1.04 billion.

On Wednesday, shares of the company closed at $47.34.