Cognizant Sees Solid Profits

The company tops estimates and lifts its outlook for 2003.
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Strong software outsourcing results boosted

Cognizant Technology Solutions'

(CTSH) - Get Report

second-quarter revenue, and the company's earnings topped analysts' consensus estimates by 2 cents.

The company also raised its third-quarter and full-year earnings outlooks. Shares of Cognizant jumped more than 13% on the

Nasdaq

to close at $30.73.

In the quarter ended June 30, the company earned $13.5 million, or 20 cents a share, ahead of the consensus forecast of 18 cents a share. The company earned $8.6 million, or 14 cents a share, in the year-ago period after a stock split.

Revenue surged 61% to $87.4 million. Cognizant also said its April 1 acquisition of software maker Aces accounted for $2.3 million of revenue.

"We have seen strong demand across all our verticals, with financial services and healthcare performing particularly well," said Kumar Mahadeva, chief executive of the Teaneck, N.J., company.

Cognizant said on a conference call with investors that it expects to earn 21 cents a share on revenue of $94 million in the third quarter. Analysts expect 20 cents a share on sales of $86.1 million. The company had sales of $61.2 million in the third quarter last year, with a profit of 15 cents a share.

Additionally, the company forecast 2003 sales of $354 million and earnings of 82 cents. Analysts expect 77 cents a share on revenue of $333.9 million. Sales were $229.1 million in 2002, and Cognizant earned 57 cents.

Operating margins are expected to remain stable through 2004, at 19% to 20%, the company said.