Satyam Guidance Soft

The stock drops.
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Satyam Computer Services

(SAY)

, the India-based IT consulting and services provider, reported a 36% rise in fourth quarter earnings.

But the stock dropped 9% as investors were disappointed by the company's first-quarter sales growth target of around 4%.

The company earned $62.3 million, or 39 cents an American depositary share, compared with $45.8 million a year ago. Analysts surveyed by Thomson First Call were expecting earnings of 36 cents a ADS in the most recent quarter.

Fourth-quarter revenue rose 34% from a year ago to $300.7 million as against analysts' expectation of of $299 million.

The company expects a revenue growth of 24% to 26% and also projects earnings rise of 20% to 22% for the fiscal year 2007.

Net profit margins rose 36 basis points to 20.72%, led by increased operational efficiencies. The fourth quarter also witnessed the highest ever recruitment of 3,079 associates.

"We believe that the demand environment will continue to remain buoyant in Fiscal 2007 due to increased IT spend by organizations as well as greater acceptance of the global delivery model," the company said. "To address the available opportunities, we are strengthening our business solutions capability by hiring best-in-class associates from across the world, and are making a focused attempt at enhancing our competence in new service areas that would be the drivers of growth going forward. Inorganic growth as a means to accelerate our competency continues to be a key objective of our long-term growth plan."

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