For Immediate Release
Chicago, IL – May 5, 2010 – Zacks.com Analyst Blog features: Cognizant Technology Solutions Corporation (CTSH), Infosys Technologies Ltd. (INFY), Wipro Limited (WIT), Health Care REIT Inc. (HCN) and Forest City Enterprises Inc. (FCE.A).
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Here are highlights from Tuesday’s Analyst Blog:
Cognizant Beats by a Penny
Cognizant Technology Solutions Corporation (CTSH) reported revenues of $959.7 million in the first quarter of 2010, up 28.7% year over year and up 6.3% sequentially.
Operating margin came in at 19.1%. Excluding stock-based compensation expense of $13.9 million, operating margin came in at 20.5%, above management’s targeted range of 19-20%.
Net income came in at $151.5 million or 49 cents per share, compared to net income of $113.1 million or 38 cents per share in the previous quarter. This beat the Zacks Consensus Estimate by a penny.
Excluding stock-based compensation expense and applicable stock-based Indian fringe benefit tax expenses, EPS was 53 cents, compared to 41 cents in the year-ago quarter.
Going forward, management expects revenues of at least $1.015 million in the second quarter of 2010. EPS is projected at 51 cents. Excluding stock-based compensation expense, EPS is forecasted at 55 cents.
Management increased its guidance for 2010 on the backdrop of an improving macroeconomic environment. In 2009, the company made significant investments in new areas, including consulting and emerging markets, new solutions such as enterprise analytics, and new technologies such as cloud and mobile computing.
For 2010, Cognizant expects revenues of at least $4.1 billion, up from the previous estimate of $3.935 billion, and an increase of 25% from 2009. EPS is estimated to be $2.10. Excluding $0.16 of estimated stock-based compensation expense, EPS is forecasted to be $2.26.
On the last call, management stated that the global economic scenario is showing signs of recovery and the business environment has become more stable compared to year-end 2009. IT spending is expected to get a boost in 2010 and Cognizant expects to win significant business.
Though there is an element of uncertainty about the level of new economic activity in key markets, Cognizant believes “offshoring” as a proportion of IT budgets will increase compared to 2009.
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.
Health Care REIT FFO Dips
Health Care REIT Inc. (HCN), a real estate investment trust (REIT) that operates senior housing and health care real estate, reported first quarter 2010 FFO (funds from operations) of 51 cents per share, compared to 79 cents in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
The decrease in year-over-year FFO was primarily due to non-recurring charges of 24 cents per share, primarily related to debt extinguishment charges and termination of a lease. Excluding the one-time items, FFO for the quarter was 75 cents per share compared to 81 cents in the year-ago period.
During the quarter, Health Care REIT completed $585 million of gross new investments in large senior housing properties and state-of-the-art medical facilities. These include the acquisition of 17 medical office buildings in Wisconsin, totaling 1.15 million square feet, through a joint venture with Hammes Company. Also included is the acquisition of a 49% interest in a seven-building life sciences campus spanning across 1.2 million square feet in University Park in Cambridge, Massachusetts, through a joint venture with Forest City Enterprises Inc. (FCE.A). The company also completed $164 million worth of development projects during the quarter.
Subsequent to the quarter end, Health Care REIT completed the acquisition of five assisted living properties in Nebraska and Iowa (295 units) for $49 million, and three senior housing facilities in Indiana (300 units) for $36 million. Year-to-date, the company completed gross new investments totaling over $700 million.
For full year 2010, Health Care REIT increased its net investment guidance to a range of $700 million to $1.1 billion from its earlier guidance of $700 million to $900 million.
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