Emboldened by strong second-quarter growth, information technology services firm
raised its full-year profit and revenue targets.
The company said Wednesday that net income for the second quarter rose to $82.3 million, or 54 cents a share, from $55.1 million, or 37 cents a share, during the same quarter last year.
Excluding stock-based compensation expenses, Cognizant earned 59 cents a share. That topped the company's own guidance and analysts' average estimate of 52 cents, according to Thomson Financial.
Cognizant's operating margin tightened to 19.4% from 20% a year earlier, but remained in line with the company's 19%-to-20% target range. India-based IT services firms like Cognizant have struggled to prop up margins as the local currency, the rupee, appreciates against the dollar and wages surge.
Strong demand from customers in banking, insurance, telecommunications and health care boosted revenue 53% to $516.5 million, ahead of analysts' forecasts.
"Cognizant's second-quarter performance was driven by growth across all dimensions of our business: vertical industry segments, service-areas and geographies," said Chief Executive Francisco D'Souza, in a statement.
Growth was strongest in Europe, where revenue rose 79%. In the previous quarter, Europe accounted for 14% of total revenue, with the U.S. accounting for most of the rest.
"During the quarter, we surpassed the $2 billion annual revenue run rate, achieving this milestone just six quarters after surpassing a $1 billion annual revenue rate in the fourth quarter of 2005."
Cognizant said it expects to earn at least $2.40 a share, excluding stock-based compensation expenses, in line with estimates. The company also raised its forecast annual revenue of $2.11 billion, slightly above analyst expectations.
The company's board has approved plans to spend an additional $100 million in expanding its facilities in India. Cognizant has recently doubled the size of its Chennai campus, and has increased the plans for its Coimbatore facility to over 725,000 square feet.
Though the company is headquartered in Teaneck, N.J., it has a substantial amount of its workforce in India.
Cognizant shares were recently up 11 cents to $81.09.