Virtusa Earnings: Here’s Why Investors are Ambivalent Now

Virtusa Corp. (NASDAQ:VRTU) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Virtusa Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 20.83% to $0.29 in the quarter versus EPS of $0.24 in the year-earlier quarter.

Revenue: Rose 18.74% to $90.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Virtusa Corp. reported adjusted EPS income of $0.29 per share. By that measure, the company beat the mean analyst estimate of $0.28. It missed the average revenue estimate of $90.75 million.

Quoting Management: Kris Canekeratne, Virtusa’s Chairman and CEO, stated, “We are pleased with our first quarter results. Our year-over-year growth continues to be driven by our key strengths and differentiators that generate tangible business benefits for our clients, including our IT rationalization expertise, industry leading transformational solutions, regulatory and compliance services, and leadership position in millennial enablement. We continue to have success extending our strategic role with our clients and as a result, we are increasing our market opportunity.”

Key Stats (on next page)…

Revenue increased 0.61% from $89.95 million in the previous quarter. EPS decreased 17.14% from $0.35 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.32 and has not changed. For the current year, the average estimate has moved down from a profit of $1.34 to a profit of $1.32 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)