This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Light Forecast Smacks Cognizant

Updated from 11:23 a.m. EST

SAN FRANCISCO -- Tech services firm Cognizant (CTSH - Get Report) suffered a massive selloff after reporting third-quarter earnings as investors appeared spooked by an apparent slowdown in IT spending.

While the company reported third-quarter revenue and profit above expectations, its forecast for fourth-quarter growth forecast was lighter than in past years. During a conference call with analysts, Chief Executive Francisco D'Souza and CFO Gordon Coburn said they hadn't seen the typical flurry of fourth-quarter spending, known as a "budget flush," possibly stemming from macroeconomic concerns.

The company's third-quarter net income rose to $96 million, or 32 cents a share, from $61 million, or 20 cents a share, in the same quarter a year earlier.

Excluding stock-based compensation expenses, Cognizant earned 34 cents a share, beating analysts' consensus forecast of 32 cents, according to Thomson Financial.

Revenue rose 48% to $559 million, edging past most forecasts.

For the fourth quarter, Cognizant forecast earnings of 34 cents a share, excluding items, matching analysts' average estimate. The company is expecting revenue in the range of $590 million to $595 million, below the $598 million analyst consensus.

Cognizant shares were recently down $7.47, nearly 19%, to $32.14, on volume that is nearly six times the average.

The selloff hit other IT services and consulting firms. India-based Infosys (INFY - Get Report) saw its shares drop $3.49, or 7%, to $45.33. Accenture (ACN - Get Report) shares were recently trading down $1.49, or 4%, to $36.06.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs