Q3 Results: Cognizant’s Profit Misses Estimates Due To Currency Fluctuation
Cognizant cut its full-year guidance to 8.9 percent.
Cognizant’s profit in the July-September quarter rose despite foreign exchange losses due to currency fluctuations.
Net profit of the U.S.-headquartered software services provider rose 4.6 percent sequentially to $477 million in the three months ended September, according to its media statement. Analysts tracked by Bloomberg had pegged profit at $658 million.
The lower-than-expected profit was mainly due to higher net non-operating foreign exchange losses this year, driven by the rupee’s depreciation, the statement said.
Cognizant’s revenue rose 1.7 percent over the previous quarter to $4.08 billion. The company said it expects revenue to remain in the range of $4.09-4.13 billion in the next quarter. For the full year, company has narrowed its revenue guidance to $16.09-16.13 billion from $16.05-16.30 billion.
Operating margin, too, improved quarter-on-quarter to 18.3 percent from 16.7 percent, according to its earnings supplement. The expansion was due to higher utilisation level, simplifying business unit structure and leveraging corporate function expenses more effectively, the software services exporter said.
“We delivered a solid performance in the third quarter as we continued to focus on sustainable revenue growth while increasing margin,” Karen McLoughlin, chief financial officer, said in the statement. “The strength of our balance sheet allows the company to maintain financial flexibility while driving a substantial return of capital to shareholders.”
The company also declared a quarterly cash dividend of $0.2 a share for shareholders of record at close on Nov. 20, 2018. The dividend will be payable on Nov. 30. billion