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Satyam Sets Bar Higher

The IT services company beats on both lines and raises guidance.
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Satyam Computer Services (SAY) easily surpassed net income and revenue estimates for its second quarter, and raised its guidance for the full year.

Satyam said it earned $65.5 million, or 21 cents a share, growing 26.9% from the same quarter last year. The company forecast earnings per share of 18 cents for the quarter.

Revenue was $352 million, rising 31% from the same period a year ago. Satyam had expected to report between $337 million and $338.6 million in sales.

Analysts surveyed by Thomson First Call forecast an EPS of 17 cents on sales of $341.2 million.

The Indian IT services company raised its full-year projections to 86 cents a share on the bottom line. On the top line, Satyam expects between $1.43 billion and $1.44 billion for the full year, rising from its earlier estimate of $1.373 billion and $1.395 billion.

The consensus for the full year is 79 cents a share, and revenue of $1.4 billion.

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"We are observing a healthy demand environment signifying greater adaptation of the global delivery model, and we believe, based on our interactions with key decision makers, that this positive trend will continue in the near term," Chairman B. Ramalinga Raju said in a statement.

"We are also pleased to note that a greater portion of discretionary spending is being directed towards leveraging the global delivery model," Raju added.

CFO Srinivas Vadlamani said that improved operational efficiency helped mitigate the impact of

salary hikes on margins.

The company hired 4,025 new employees during the quarter.

In recent trading, Satyam shares were off 3 cents to $21.82.