NEW YORK (TheStreet) -- It's still anyone's guess when IT consulting services, which was once a dominant industry, will get back to its lofty levels.Results from industry leaders IBM ( IBM) and Accenture ( ACN) have been less than favorable. This does not bode well for Infosys ( INFY), which is expected the report fiscal first-quarter earnings on Friday. Indicators suggests the underlying market conditions are not stabilizing as quickly as expected. This spells doom for Infosys for several reasons. While I've always liked the company's potential, Infosys' management has made some questionable decisions causing me to rethink the company's prospects. I don't disagree that the macro weakness in consulting services has had an impact on the company's decisions. But unlike Accenture and Cognizant ( CTSH), the moves that Infosys has made recently have been too reactionary. Nor do I believe that management has responded quickly or adequately enough to the changing market. This showed in the company's fourth-quarter earnings release in April. Although the company posted decent revenue growth up 18% year over year, Infosys had nothing to show for it in terms of profitability. Gross margin was down nearly 6% year over year and 2% sequentially. Due to an unfavorable mix and almost a 1% drop in prices, operating income plummeted 7% year over year, missing Street estimates by roughly 9%.
The company issued revenue guidance for full fiscal-year 2014 to come in the range of 6% to 10%, which was in line with expectations. However, I didn't see much, if any, confidence at all that the company had the formula to fix the company's eroding margins, which has been one of Infosys' biggest struggles. In that regard, management expressed difficulty in making short-term margin predictions, which suggests to me that things are not going to get better any time soon. I'm trying to find a silver lining here somewhere, but management has stopped short of outlining how Infosys plans to overcome its lack of leverage against IBM and Accencure. Making matters worse, Accenture just issued fourth-quarter revenue and earnings-per-share guidance that were 7% and 2%, respectively, below Street expectations. This tells me that aside from trying to mitigate margin and pricing pressure concerns, Infosys may have a tougher second half of the year, too. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.