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Infosys Beats, But Now Takes a Beating

by: Eric Savitz July 11, 2008 | about stocks: INFY    

Eric Savitz

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Shares of Infosys (INFY), the Indian IT outsourcing giant, are trading lower this morning despite solid results for its fiscal first quarter ended June 30.

For the quarter, Infosys posted revenue of $1.155 billion and profits of 54 cents a share; the Street had expected $1.15 billion and 51 cents.

For Q2, the company sees revenue of $1.215 billion to $1.225 billion, with EPS of 55-56 cents; the Street had been expecting $1.21 billion and 56 cents. The company had projected revenue of $1.142 billion to $1.145 billion, with EPS of 52 cents.

For the March 2009 fiscal year, INFY sees revenue of $4.97 billion to $5.05 billion, with EPS of $2.32-$2.36; the Street consensus was $5.03 billion and $2.31. The revenue guidance is unchanged from the last quarter, while EPS guidance is a penny higher at both ends of the range.

In a statement, CEO S. Gopalakrishnan said that “although the global economic environment continues to remain uncertain and could impact IT spending in the short term, we see several opportunities for growth as customers relentlessly focus on improving efficiency.”

CFO V. Balakrishnan said margins for the quarter were impacted from salary increases and visa costs, partially offset by rupee depreciation. He said the company expects the currency markets to remain volatile in the short term. The company’s operating margin in the quarter was 26.7%, up from 24.7% a year earlier; gross margin of 39.7% was up from 38.7%.

Late morning, INFY is down $5.20, or 11.82%, to $38.75.

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