Cognizant beats profit forecasts but cuts full-year outlook

Cognizant Technology Solutions Corp posted a better-than-expected quarterly profit, but the IT services provider lowered its full-year forecast on low demand.

The company lowered its full-year adjusted earnings outlook to $3.62 per share on revenue of at least $7.34 billion, from its previous forecast of $3.69 per share in adjusted earnings on revenue of $7.53 billion.

Analysts on average were expecting full-year earnings of $3.45 per share on revenue of $7.54 billion, according to Thomson Reuters.

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"Due to a slower than anticipated acceleration in demand as we entered the second quarter, we are adopting a more conservative stance for the remainder of the year and revising our guidance to at least 20 percent revenue growth for 2012," Chief Executive Francisco D'Souza said in a statement.

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The company sees second-quarter adjusted earnings of 87 cents per share on revenue of at least $1.79 billion.

Analysts had been expecting second-quarter earnings of 83 cents per share on revenue of $1.84 billion.

Indian rivals Wipro Ltd and Infosys Ltd forecast muted revenue growth last month, highlighting the turbulence software exporters face due to an uncertain global economy.

However, rival and India's top software services exporter Tata Consultancy Services Ltd said it expects to outperform the sector outlook, an indication it is poised to gain at the expense of rival Infosys.

For the first quarter, Cognizant's net income rose to $243.6 million, or 79 cents per share, from $208.3 million, or 67 cents per share, a year ago.

Excluding items, the company, which gets more than three-quarters of its total revenue from the United States, earned 86 cents per share.

Revenue for the quarter rose 24.8 percent to $1.71 billion from $1.37 billion a year ago.

Analysts had expected earnings of 79 cents per share on revenue of $1.71 billion, according to Thomson Reuters.

Shares of the Teaneck, New Jersey-based company have fallen 4 percent since it said it does not expect Europe to rebound in 2012 on February 8.

The S&P Software Services Index has risen 3 percent in the same period.

Shares of the company closed at $69.66 on Friday on the Nasdaq.

Reuters