Cognizant results beat estimates as European demand soars

Cognizant Technology Solutions Corp (CTSH.O) reported better-than-expected quarterly results as revenue from Europe excluding the UK jumped 54 percent, and the IT services provider raised its forecast for the year.

The company now expects 2013 earnings of at least $3.96 per share on revenue growth of at least 19 percent to $8.74 billion.

It had previously forecast earnings of at least $3.95 per share on revenue growth of at least 17 percent to $8.60 billion.

Cognizant's raised forecast is the latest sign that demand for outsourcing and IT services may be returning after quarters of uncertainty characterized by delayed deal closures, cutbacks on discretionary spending and a lack of large deals.

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India-based rivals Tata Consultancy Services Ltd (TCS.NS), Infosys Ltd (INFY.NS) (INFY.N) and Wipro Ltd (WIPR.NS) (WIT.N) also reported strong results and better-than-expected outlooks last month.

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Cognizant's revenue from the rest of Europe excluding the UK rose to $153.4 million in the second quarter, accounting for 7 percent of total revenue. It had declined by about a percent a year earlier.

The company's net income rose to $300.4 million, or 99 cents per share, in the second quarter from $251.9 million, or 82 cents per share, a year earlier.

Excluding items, earnings were $1.07 per share.

Revenue rose 20.4 percent to $2.16 billion.

Analysts on average had expected earnings of 97 cents per share on revenue of $2.13 billion, according to Thomson Reuters I/B/E/S.

Shares of the Teaneck, New Jersey-based company were up 1.2 percent at $74.30 premarket on Tuesday.

Reuters