Earnings Preview: Infosys Technologies Limited

Jul. 9.12 | About: Infosys Limited, (INFY)

Infosys Technologies Limited (NASDAQ:INFY) provides business consulting, technology, engineering, and outsourcing services worldwide. Infosys is scheduled to report its first quarter earnings results on July 12, 2012, before market open.

Technical Overview
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Infosys has a market cap of $24.88 billion and it is currently trading around $43.55 with a 52-week range of $41.40 to $67.94. The stock has fallen 15.24% year to date. The following table provides the key financial ratios for Infosys:

Key Ratio Value
Current Ratio 6.34
PEG 0.95
P/E 14.52
Forward P/E 13.16
Profit Margin 24.54%
Return On Assets (ROA) 23.59%
Return On Equity (ROE) 27.03%
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Recent News

  • On June 26, 2012, ZUNO Bank, the direct bank owned by Raiffeisen Bank International AG, and Infosys successfully rolled out a new lending product portfolio, which includes personal retail loans and overdraft lines in Slovakia and the Czech Republic, powered by Finacle™ core banking solution.
  • On June 25, 2012, Infosys announced that it has opened a second office in the city of Nagoya in Japan. The office is located in the manufacturing hub of Chubu, and is expected to play a strategic role for Infosys' business in Japan as the company aggressively pursues clients in the manufacturing domain.
  • On June 14, 2012, Infosys announced that it has signed a Memorandum of Understanding (MoU) with The State of Israel, to establish and enhance cooperation in industrial research and development.
  • On June 14, 2012, McCamish Systems, LLC, an Infosys company, specializing in insurance and retirement business process solutions, announced a strategic business alliance with Resonant Software, a company with an underwriting and new business solution for the life insurance industry.
  • On June 12, 2012, Dansk Supermarked A/S, a leading retailer in the Nordics, has engaged Infosys as its strategic partner to transform its cross-channel commerce program.
  • On June 08, 2012, Infosys announced another successful partnership sparked by its recently unveiled Finacle™ digital commerce solution.

Analyst Guidance and Earnings History

The first quarter revenues are expected to be $1.78 billion compared to $1.67 billion for the same quarter last year. Earnings per share for the first quarter are expected to be 73 cents a share, up from 67 cents a share in the year-ago period.

The average price target from analyst for Infosys is $49.94 with average rating is OVERWEIGHT
Out of the last 4 quarters, Infosys has met or exceeded the EPS estimates all the 4 times. The following chart shows the Analyst estimates history and the actual EPS results:
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The following chart shows the annual summary of Sales and Net income for Infosys:
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Cognizant Technology Solutions Corporation (NASDAQ:CTSH), Wipro Ltd. (NYSE:WIT), Accenture PLC (NYSE:ACN) and Computer Sciences Corporation (NYSE:CSC) are considered as major competitors for Infosys and the table below provides the key metrics for these companies:
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Sources: Some of the data is taken from Google Finance, Yahoo Finance, Nasdaq, Finviz and investor sites.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ACN, INFY, CTSH, CSC, WIT over the next 72 hours.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.