Cognizant Technology Solutions Corporation (CTSH) reported revenues of $902.7 million in the fourth quarter, up 20% year over year and up 6% sequentially. Earnings per share (EPS) came in at 50 cents compared to 41 cents in the year-ago quarter and beat the Zacks Consensus Estimate of 46 cents.
Operating margin came in at 19.9%, in line with the management’s targeted range of 19% – 20%, but slightly down from 20.5% generated a year ago. During the quarter, the company expanded its headcount by 10,300 and ended the year with a headcount of 78,400.
Despite the global slowdown, Cognizant continues to deliver strong results. For 2009, the company reported revenues of $3.279 billion, up 16% from a year ago. Earnings per share came in at $1.90. Operating margin came in at 20.3%, almost flat with 2008. Cognizant ended the quarter with cash and equivalents of $1.1 billion, up from $735.1 million at year-end 2008.
Cognizant remains well diversified among verticals such as financial services, health care and life sciences, retail, manufacturing and logistics. This diversification has helped the company maintain its top line even in this tough economic climate.
Going forward, management expects revenues of at least $935 million in the first quarter of fiscal 2010. EPS is projected at 52 cents. For 2010, Cognizant expects revenues of at least $3.935 billion, an increase of 20% from 2009. EPS is estimated to be $2.19.
Given the early signs of economic recovery, we expect growth to accelerate in the coming quarters. Headquartered in Teaneck, New Jersey, Cognizant is a leading provider of custom information technology to Fortune 1000 customers. The company competes with Infosys Technologies Ltd (INFY) and Wipro Limited (WIT) in this space.
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