S&P 500 (NYSE:SPY) component Cognizant Technology Solutions Corporation (NASDAQ:CTSH) reported net income above Wall Street’s expectations for the second quarter. Cognizant Technology Solutions Corporation provides custom IT consulting and technology services as well as outsourcing services for companies in North America, Europe and Asia. Cognizant Technology was a Wall St. Cheat Sheet Premium Stocks Selection in August of 2010>>
Cognizant Technology Solutions Earnings Cheat Sheet for the Second Quarter
Results: Net income for Cognizant Technology Solutions Corporation rose to $208 million (67 cents per share) vs. $172.2 million (56 cents per share) in the same quarter a year earlier. This marks a rise of 20.8% from the year earlier quarter.
Revenue: Rose 34.4% to $1.49 billion from the year earlier quarter.
Actual vs. Wall St. Expectations: CTSH reported adjusted net income of 72 cents per share. By that measure, the company beat the mean estimate of 66 cents per share. Analysts were expecting revenue of $1.46 billion.
Quoting Management: “We continue to see stronger than anticipated demand for our increasing range of services across the industries we serve. Over this past year, we have seen clients seeking our services not just to drive operational efficiencies, but also to transform their businesses to adapt to next generation technologies and to a new generation of ‘born digital’ workers and consumers,” said Francisco D’Souza, President and CEO. “We believe that our ability to attract the world’s best talent and our unique global delivery model infused with deep consulting and domain expertise are among the reasons why we see continued demand for our services that deliver both top-line and bottom-line value to our clients, and continued industry-leading growth for Cognizant.”
The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 41.5%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 45.2% from the year earlier quarter.
The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 37.5% and in the fourth quarter of the last fiscal year, the figure rose 43.2%.
The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the first quarter, by one cent in the fourth quarter of the last fiscal year, and by 6 cents in the third quarter of the last fiscal year.
The company’s cost of sales rose 34.3% from a year earlier. Last quarter, cost of sales was 58% of revenue, similar to a year earlier.
Competitors to Watch: Intl. Business Machines Corp. (NYSE:IBM), iGATE Corporation (NASDAQ:IGTE), Syntel, Inc. (NASDAQ:SYNT), Computer Sciences Corp. (NYSE:CSC), Infosys Tech. Ltd. (NASDAQ:INFY), Wipro Limited (NYSE:WIT), CIBER, Inc. (NYSE:CBR), Edgewater Technology Inc. (NASDAQ:EDGW), Virtusa Corporation (NASDAQ:VRTU), and Patni Computer Systems Ltd. (NYSE:PTI).
(Source: Xignite Financials)