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Syntel Shares Jump After 1st-quarter Earnings

The Associated Press

TROY, Mich. (AP) — Information technology services company Syntel Inc. said Monday its first-quarter profit climbed, boosted by a gain on the reversal of tax reserves and lower expenses.

The company earned $27.3 million, or 66 cents per share, up 34 percent from $20.4 million, or 49 cents per share, in the same period a year earlier.

The latest quarter's results included a gain of 10 cents per share on the tax reserve reversal.

Revenue fell 2 percent to $96.4 million from $98.5 million, hurt in part by reduced pricing and lower discretionary spending by Syntel's customers.

Analysts, on average, were expecting a profit of 48 cents per share on sales of $101 million, according to a poll by Thomson Reuters. Analysts typically exclude one-time items from their estimates.

"We continue to see the impacts of the global recession on our (clients') behaviors and as a result, Syntel's top line growth. The combination of currency headwinds, pricing pressure and delayed decision making are impacting our revenue," said President and Chief Executive Keshav Murugesh in a statement.

The quarter's selling, general and administrative expenses declined 9 percent to $18.7 million.

Syntel expects full-year earnings between $2.12 and $2.42 on sales of $385 million to $415 million.

Analysts are expecting earnings of $1.90 per share on sales of $406.7 million.

The company's shares rose $3.51, or 15 percent, to $26.72 in midday trading, having changed hands between $16.14 and $38.01 in the past 52 weeks.