The S&P 500 was falling almost 5 points to 1,364.24.
Shares of Cognizant fell 17.92% to $57.18. The information technology company reported first-quarter earnings Monday that met analysts' expectations but it lowered its full-year earnings guidance.
"Due to a slower than anticipated acceleration in demand as we entered the second quarter, we are adopting a more conservative stance for the remainder of the year and revising our guidance to at least 20% revenue growth for 2012," said CEO Francisco D'Souza in a statement. "We continue to believe that we have the right portfolio of services to sustain our industry leading growth and also meet the changing demands in the market as clients continue to grapple with their dual mandates of cost containment and innovation/business transformation."The company lowered its full-year 2012 revenue guidance to $7.34 billion from a previous estimate of $7.53 billion. Cognizant also expects earnings of $3.36 a share from a prior estimate of $3.43 a share. Cognizant trades at an estimated price-to-earnings ratio for next year of 13.71 times; the average for computer services companies is 18.52. For comparison, Teradata (TDC) has a higher forward P/E of 23.51. Twenty-three of the 28 analysts who cover Cognizant rated it buy; five analysts gave the stock a hold rating. The stock has declined 12.06% year to date.
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