Cognizant Logs $18 Million Loss In Fourth Quarter
Cognizant posted a net loss of $18 million on account of one-time provisional income tax expense in December.
U.S.-based IT major Cognizant today posted a net loss of $18 million for the December ended quarter, on account of one-time provisional income tax expense of $ 617 million related to the Tax Reform Act in the U.S.
The company posted a profit of $ 416 million in the year-ago period.
Cognizant, which competes with Indian firms like TCS and Infosys, saw its revenue grow 10.6 percent to $ 3.83 billion in the fourth quarter of 2017 from $ 3.46 billion in the year-ago period, Cognizant said in a statement.
During 2017, the company saw its revenue rise 9.8 percent to $ 14.81 billion, meeting its own top line forecast of 9-10 percent during the year. Its net profit was at $1.5 billion in 2017.
For 2018, Cognizant expects its revenue to be in the range of $16-16.30 billion, translating to a topline growth of 8-10.1 percent. Cognizant said its first quarter revenue is expected to be in the range of $ 3.88-3.92 billion, a growth of 9.3-10.4 percent year-on-year.
Consistent and solid execution throughout 2017, along with continued investments to further accelerate the shift to Digital during the year, gives us confidence that we can deliver a strong 2018.Francisco D’Souza, CEO, Cognizant
He added the company expects "a new generation of digital heavyweights emerging", as clients invest in new technologies like artificial intelligence, analytics, and cloud.
In December, the U.S. enacted the Tax Reform Act, which significantly revised the U.S. corporate income tax law by reducing the U.S. federal statutory corporate income tax rate from 35 percent to 21 percent starting in 2018.
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Among other provisions, the Act also implemented a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries.
The company said it recorded a one-time provisional income tax expense of $ 617 million, which was "primarily attributable to the deemed repatriation tax on undistributed earnings of foreign subsidiaries".
"We expect our overall effective corporate income tax rate to be approximately 24 percent for 2018 and 24-26 percent beginning in 2019," it added.