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For the second quarter in a row, net profit declined for Cognizant Technology Solutions Corporation.
The US-based IT company with large offshore presence in India, reported a 7 per cent drop in net profit to $520 million for the first quarter ended March 31, 2018, as against a net profit of $557 million for the same quarter last year.
Cognizant in December quarter attributed the reason for net loss of $18 million to a one-time provisional income tax expense of $617 million related to Tax Reform Act in US.
The drop in net profit in the March quarter was mainly due to changing tax rates, which were higher this year when compared with the first quarter last year, said a company spokesperson.
Revenue in the March 2018 quarter rose by 10 per cent to $3.91 billion ($3.55 billion) mainly due to higher spending by clients in healthcare and financial sectors.
Consulting and technology services revenue increased by 10 per cent year-on-year while outsourcing services revenue was up by 9.7 per cent.
Seven new customers
Karen McLoughlin, Chief Financial Officer, Cognizant, discussing quarterly results, told analysts that the company signed seven new strategic customers — defined as clients that have the potential to generate at least $5 million to $50 million or more in annual revenue — to end the quarter with a total of 364 clients.
Employee headcount increased by 1,400 to a total of 2.61 lakh of which around 1.80 lakh are in India.
“We achieved solid financial results in first quarter and progressed our shift to digital services and solutions. Cognizant has built the capabilities and scale to help clients digitise their offerings, create personalised customer experiences, instrument their operations, and modernise their IT infrastructure. This digital-at-scale value proposition is winning with clients and positioning us well to deliver a strong 2018,” the company’s Chief Executive Officer Francisco D’Souza, said in a press release. The company expects second-quarter 2018 revenue to be in the range of $4 billion to $4.04 billion and full year 2018 revenue in the range of $16.05 billion to $16.30 billion, the release said.
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