Cognizant Technology Solutions has reported net profit of $208.3 million during the first quarter of 2011, as compared to $151.5 million during the same period last year, an increase of 38 per cent. These figures are on the GAAP (generally accepted accounting principles) basis.
Revenue for the first quarter of 2011 rose to $1.37 billion from $959.7 million in the first quarter of 2010, an increase of 42.9 per cent. Net headcount addition for the quarter exceeded 7,200.
The information technology, consulting, and business process outsourcing services company, in its guidance for the second quarter of 2011, anticipated revenue to be at least $1.45 bn. Earnings per share was expected to be $0.65 on a GAAP basis and $0.70 on a non-GAAP basis. Revenue for the 2011 financial year was expected to be at least $5.925 billion, up at least 29 per cent compared to 2010.
Due to continued volatility in the currency markets, the EPS prediction excludes any future non-operating foreign currency exchange gain or loss.
“We are particularly pleased with our continued success in recruiting talent throughout the world to position Cognizant for continued industry-leading growth,” said Gordon Coburn, Chief Financial and Operating Officer. “Our strong financial model continues to provide the resources to drive our long-term competitive differentiation.
We are confident in our strategy of maintaining our non-GAAP operating margins within a targeted range of 19-20 per cent, while allowing for strong and consistent investment in new service and delivery capabilities, as well as in the best global talent.”
New investments
Cognizant is to invest $285 million in 2011, the bulk of it in India, said Coburn. The bulk would be on its notified techno-campuses in Special Economic Zzones.
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The company has planned to add eight million sq ft, with the capacity to house 55,000 employees. Around 75 per cent of the global headcount of 111,000 is in India.
“We saw a decline in attrition during the first quarter. This number has decreased sequentially to 15.1 per cent,” he said.
The real estate development plan is to create additional software development and training facilities in regions designated as SEZs in Chennai, Pune, Coimbatore, and Kolkata.
Around 78 per cent of revenue came from clients in North America, 18.7 per cent in Europe and 3.3 per cent from the Asia Pacific, Middle Eastern and Latin American markets.
The company had a gross addition of 59 new customers during the first quarter and closed the quarter with 714 active customers, said Coburn.