Cognizant beats estimates, posts 4% jump in revenue
Bank loan growth is expected to touch a 58-year low of around 7 per cent in FY20.
Last Updated: Feb 07, 2020, 08.25 AM IST
Technology services provider Cognizant on Thursday posted higher than expected revenue in its fourth quarter ended December 31.
The New Jersey-headquartered company reported a 3.8% year-onyear growth in revenue at $4.28 billion, compared to $4.23 billion expected by analysts.
Net profit in the quarter was down 39% at $395 million, compared to $648 million in the year-ago period.
Cognizant has forecast 2-4% growth in constant currency terms for 2020, as it continues its restructuring process. The forecast includes the impact of a negative 110 basis points due to the company’s exit from certain content services businesses.
For 2019, the company had guided for revenue growth of 5.1%, but managed to achieve 5.2% in constant currency terms, at $16.8 billion. “We feel pleased (that we beat the top end of our guidance) but we always want to do better,” CEO Brian Humphries told ET in an interview.
Speaking to analysts in a postearnings call, Humphries said the company would look to enter 2020 with a two-pronged strategy to expose Cognizant to faster-growing market categories.
“The first element is to protect and optimise our core business while scaling internationally. The second part is to invest to compete and win in four key digital battlegrounds: data, digital engineering, cloud and IoT.”
Cofounder Francisco D’Souza will step down from the board effective March 31. He cofounded Cognizant in 1994 and served as the company’s CEO from January 2007 through March 2019.
The company also announced the appointment of Vinita Bali to its board as a new independent director effective February 24. Bali served as the managing director and chief executive officer of Britannia Industries from 2005 to 2014.
Cognizant has spent $49 million in severance pay for the employees it has let go and $29 million to retain key employees in the December quarter, as it restructures its business.
Under Humphries, Cognizant had begun taking a slew of steps to invest and boost growth.
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