Cognizant Says Its Revenue Are Up Because It's Winning in Digital

NEW YORK  (TheStreet) -- IT services and consulting giant Cognizant Technology Solutions (CTSH) said Monday its new Digital Works initiative, which helps its clients design, build and run their digital businesses by simplifying big data issues and offering better analytics, is helping the company lure its digital enterprise clients to its traditional services, too. That has lead to a double-digit increase in first quarter revenue.

"We are doing well because we are winning in digital," said Francisco D'Souza, Cognizant's CEO, on the earnings call. "As the trend toward digital picks up, it helps drive our clients to our traditional services." These traditional services include business and technology consulting, systems integration, application development and maintenance, IT infrastructure services, analytics, business intelligence, data warehousing, CRM and supply chain management.

The Teaneck, N.J.-based firm said its health care segment saw sales increase 42% year-over-year, financial services gained 13%, and its manufacturing business was up 7.2%. 

The company will give greater attention to increasing its business in the energy and utilities sectors, as well as in government practices, said CFO Karen McLoughlin. She added that the company's intention is to focus on obtaining new federal business in areas related to to the Affordable Care Act, Medicare and government-backed housing loans.

Cognizant reported revenue for the 2015 first quarter was up 20% from a year earlier to $2.91 billion while GAAP net income was $382.9 million, up 9.7%. The stock was up more than 7% in late afternoon trading, at $63.37.

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