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Patni Computer Posts Plunging Earnings

First quarter earnings fell about 17%, hurt by increased foreign exchange loss.

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On April 29, 2009,

Patni Computer Systems


reported that its net income for Q1 FY09 plunged 17.4% year-over-year as the foreign exchange loss surged almost three times to $6.50 million. Net income declined to $14.95 million or $0.12 per share from $18.11 million or $0.13 per share a year ago. In local currency terms, net income grew 5.0% to Indian Rupees (INR) 760.70 million from INR 724.60 million. The most recent consensus estimate was $0.18 per share.

Revenue plummeted 11.4% to $156.38 million from $176.44 million a year ago. However, in local currency, revenue soared 12.7% to INR 7.95 billion from INR 7.06 billion in Q1 FY08. The company lost 11 clients during the quarter, taking its total active clients at the end of Q1 FY09 to 320. Geographically, revenue from the Americas contributed 79.0% to the total revenue, while the EMEA and APAC regions added 15.0% and 6.0%, respectively. Looking at industry verticals, revenue from Insurance accounted for 27.4% of the total revenue; Manufacturing, Retail and Distribution contributed 29.2% to the total revenue; and revenue from Financial Services, Communications, Media and Utilities, and Product Engineering Services accounted for 13.6%, 14.4%, and 15.3%, respectively. Revenue from Time and Material projects contributed 62.5% to the total revenue, while Fixed Price projects accounted for the remaining 37.5% of total revenue.

Recently, PTI has formed a local SAP services partnership with SAP Japan to enhance its proficiency in delivering high value to its customers as an SAP services Partner in Japan.

Looking forward to Q2 FY09, PTI expects net income (excluding the foreign exchange gain/loss) to be in the range of $26.50 million to $27.00 million, on revenues of $158.00 million to $159.00 million. Additionally, the company expects mark-to-market forex loss to be approximately $10.00 million during Q2 FY09.