Tue, Jul. 19, 1:56 PM
- Shares of Wipro (NYSE:WIT) are down 4% after missing on both lines of its FQ1 report.
- Gross revenue $2.0B (+11% Y/Y).
- Net income of $304M (-6%).
- IT Services Segment Revenue was $1.93B (+7.6%).
- Non-GAAP constant currency IT Services Segment revenue (+9.5%).
- IT Services Segment profits of $345M (-3.0%).
- Margin fell sharply by 190 bps to 17.8%.
- The company expects Q2 revenue for IT services business to be in the range of $1.93-$1.95B, a growth of 0.01%-1.00% (Q/Q).
- Previously: Wipro misses by $0.02, misses on revenue (July 19)
Thu, Jan. 14, 1:12 PM
- Infosys (NYSE:INFY) has jumped to its highest levels since November after beating FQ3 revenue estimates (EPS was in-line) and raising its FY16 (ends March '16) dollar-based revenue growth guidance to 8.9%-9.3% from a prior 6.4%-8.4%, and above a 7.4% consensus. Credit Suisse has responded by upgrading to Outperform.
- IT outsourcing peers Cognizant (CTSH +5.3%), Accenture (ACN +2.6%), and Wipro (WIT +2.6%) have joined Infosys in outperforming. The Nasdaq is up 1.8%, and the S&P 1.6%.
- FQ3 details: Forex had a 4% impact on Infosys' FQ3 sales growth (8.5% vs. 12.5%). Gross margin fell to 37.2% from 38.7% a year ago. Operating expenses rose 11% Y/Y to $296M. Infosys ended FQ3 with $4.5B in cash, and no debt.
- CEO Vishal Sikka: "Alongside grassroots innovation, we continue to see growing adoption of our Aikido services, bringing the power of intelligent systems, automation and software to amplify the skills and imaginations of our people. This combination helped us deliver encouraging results despite the traditional seasonality of the quarter and the additional headwinds..."
- COO Pravin Rao: "The healthy volume growth this quarter has been encouraging. The lesser working days and our investments into additional trainees resulted in softer pricing and utilization for the quarter ... We continue to simplify our policies and enable greater agility within the company, with the goal of boosting our productivity."
- Infosys' FQ3 results, earnings release
Dec. 17, 2015, 1:27 PM
- Sterne Agee has launched coverage on Wipro (WIT -2.3%) with an Underperform rating.
- The launch comes two days after the Indian IT outsourcing firm forecast FQ3 (calendar Q4) IT services revenue would be at the low end of a prior $1.841B-$1.878B guidance range due to the impact of flooding in Chennai, where Wipro has over 22K employees. The company added it has "largely seen the restoration of normal operations" at its Chennai facilities.
- Two weeks ago: Wipro buying German IT services firm for $78M
Oct. 12, 2015, 1:23 PM
- Though Infosys (NYSE:INFY) beat FQ1 revenue estimates (while posting in-line EPS) and reiterated FY16 (ends March '16) constant currency revenue growth guidance of 10%-12%, a strong dollar has led dollar-based revenue growth guidance to be cut to 6.4%-8.4% from 7.2%-9.2%.
- Also: The IT outsourcing giant has disclosed CFO Rajiv Bansal plans to resign. M.D. Ranganath, currently Infosys' head of strategic operations, will replace him.
- Forex had a 5.5% impact on FQ1 sales growth. COO Pravin Rao states "softness" is expected in financial services, aviation, energy, and mining demand. CEO Vishal Sikka notes industry pricing pressure is expected to continue, but does his best to stay upbeat. “Traditionally, the second half has given us dips in growth We are going to work very hard to make sure that we buck it this time. We have been foreseeing that all year.”
- Financials: Gross margin fell to 37.8% from 38.5% a year ago. Operating expenses rose 8% to $294M. Infosys ended FQ1 with $4.6B in cash, and no debt.
- Peer Wipro (NYSE:WIT), which reports on Oct. 21, is following Infosys lower.
- Infosys' FQ1 results, PR (.pdf)
Aug. 5, 2015, 9:39 AM
- With a Q2 beat on the books, Cognizant (NASDAQ:CTSH) now expects 2015 revenue of at least $12.33B and EPS of at least $3.00, above a consensus of $12.32B and $2.97. Q3 guidance is for revenue of at least $3.14B and EPS of at least $0.75 vs. a consensus of $3.13B and $0.75.
- Segment performance: Q2 Financial Services revenue (40.5% of total) +18.1% Y/Y to $1.25B. Healthcare (boosted by the TriZetto deal) +39% to $897.3M. Manufacturing/retail/logistics +12.4% to $578.3M. Other verticals +20.3% to $359.4M.
- Geographic performance: North America (78.6% of total, also boosted by TriZetto) +25.7% to $2.42B. U.K. +11.9% to $297.6M. Rest of Europe (hurt by weak euro) +2.2% to $204.7M. Rest of World +30% to $158.9M.
- Financials: Op. margin was 20.2%, down 80 bps Y/Y but slightly above Cognizant's 19%-20% target range. $153M was spent on buybacks. Cognizant ended Q2 with $3.54B in cash, and $1.06B in debt.
- Cognizant has made new highs. IT outsourcing peers Infosys (INFY +2.4%) and Wipro (WIT +2.3%) are also doing well.
- Q2 results, PR
Jul. 21, 2015, 10:08 AM
- Infosys (NYSE:INFY) is at its highest levels since April after beating FQ1 revenue estimates (while posting in-line EPS) and guiding for FY16 (ends March '16) revenue growth of 7.2%-9.2% (above a 6.5% consensus).
- Also going over well: Client adds rose to 79 from 61 a year ago, and the utilization rate rose 160 bps to 80.2%.
- An 11% Y/Y increase in operating expenses to $281M pressured EPS, as did a 50 bps Y/Y drop in gross margin to 36.4%. Infosys ended FQ1 with $4.75B in cash/investments, and no debt.
- IT outsourcing peers Cognizant (CTSH +2%) and Wipro (WIT +2.8%) are also higher. Wipro reports on July 23, and Cognizant on August 5.
- Infosys' FQ1 results, PR
Jan. 16, 2015, 11:24 AM
- Range-bound Wipro (NYSE:WIT) is up strongly after posting in-line FQ3 EPS to go with a slight revenue miss, and guiding for FQ4 IT services revenue of $1.814B-$1.850B. Consensus for total FQ4 revenue is at $1.98B.
- The IT outsourcing giant has also announced CFO Suresh Senapaty will retire on March 31. Finance SVP Jatin Dalal will succeed him.
- IT services revenue totaled $1.795B in FQ3, up 7% Y/Y but slightly missing guidance of $1.808B-$1.842B. IT products revenue totaled $123M. 44 new IT Services customers were added vs. 50 in FQ2.
- FQ3 results, PR (.pdf)
Dec. 18, 2014, 1:14 PM
- In addition to beating FQ1 estimates, Accenture (ACN +4.3%) has hiked its guidance for FY15 (ends Aug. '15) local currency revenue growth to 5%-8% from 4%-7%. On the other hand, forex is now expected to have 500 bps impact on revenue, up from a prior 200 bps.
- As a result, FY15 EPS guidance has been lowered to $4.66-$4.80 from $4.74-$4.88 - consensus is at $4.81 - and FQ2 revenue guidance of $7.25B-$7.5B is mostly below a $7.46B consensus. The market appears to have discounted forex pressures in advance.
- FQ1 new bookings totaled $7.7B, down from $8.7B a year ago. Consulting bookings fell to $3.9B from $4.3B, and outsourcing bookings to $3.8B from $4.4B.
- Gross margin fell 110 bps Y/Y to 32.2%, but cost controls helped SG&A spend fall to 17.1% of revenue from 18.7%. As a result, op. margin rose 20 bps to 15%. $670M was spent on buybacks.
- North America revenue +11% to $3.44B; Europe +5% to $2.91B; "Growth Markets" +3% to $1.55B. Forex respectively had 400 bps and 600 bps impacts on Europe and Growth Markets revenue growth.
- Accenture has made new highs. Outsourcing rivals Infosys (INFY +3%), Wipro (WIT +4.9%), and Cognizant (CTSH +4.3%) are also outperforming on a good day for equities.
- FQ1 results, PR
Dec. 15, 2014, 5:37 PM
Oct. 22, 2014, 12:41 PM
- Wipro (WIT -3.2%) expects FQ3 IT services revenue (responsible for 94% of FQ2 revenue) of $1.808B-$1.842B. The company's total FQ3 revenue consensus is at $1.99B.
- IT services revenue growth slipped to 8.6% in FQ2 from 9.6% in FQ1. Wipro notes the benefits of a weak rupee were offset by the dollar's strength against other currencies.
- Gross margin fell 30 bps Y/Y to 30.8%. G&A spend rose 16% to $107M; sales/marketing spend was nearly flat at $123M.
- FQ2 results, PR (.pdf)
Aug. 6, 2014, 9:43 AM
- Though its Q2 revenue was in-line, Cognizant (NASDAQ:CTSH) expects Q3 revenue of $2.55B-$2.58B and EPS of $0.63+ vs. a consensus of $2.66B and $0.60. Full-year guidance is for 14%+ revenue growth and EPS of $2.54+ vs. a consensus for 16.9% growth and EPS of $2.38.
- The company blames its top-line softness on "weakness at certain clients and longer than anticipated sales cycles for certain large integrated deals." The IT outsourcing industry in general has been pressured by a growing customer preference for smaller deals, and (in certain segments) the adoption of cloud services.
- Gross margin fell 70 bps Y/Y to 40.4%, and SG&A spend rose 15% to $483M. Cognizant spent over $100M on buybacks, and has increased its buyback authorization by $500M; $900M remains available under the company's buyback program.
- Peers Infosys (INFY -4.2%), Wipro (WIT -2.5%), and Accenture (ACN -1.5%) are also trading lower. Infosys dropped last month after providing cautious remarks about near-term demand to go with an EPS beat.
- Q2 results, PR
May 23, 2014, 2:43 PM
- With shares remaining below $12 following a post-earnings April selloff, Barclays has upgraded Wipro (WIT +2.6%) to Equal Weight.
- Though Wipro beat Q1 estimates last month, disappointment with guidance for Q2 IT services revenue of $1.715B-$1.755B led shares to fall. They've underperformed Indian peers that have been rallying on election-related hopes.
Mar. 13, 2014, 4:01 PM
- Aided today by a broader market selloff, Infosys (INFY -2.7%) has fallen 9% since the company hosted an investor meeting yesterday at its Bangalore HQ. Chairman Narayana Murthy stated at the event his company is likely to see 11.5% FY14 (ends March '14) revenue growth, at the low end of a prior guidance range of 11.5%-12%.
- Peers Wipro (WIT -2.8%) and Cognizant (CTSH -2%) are also down over 2%. Nomura argues Infosys is contending with company-specific issues, including skill mismatches and client project ramp-downs/cancellations. It also thinks Infosys might have higher exposure to discretionary projects at retail clients.
Feb. 5, 2014, 11:46 AM
- Cognizant (CTSH -5.1%) has guided for Q1 revenue of at least $2.42B and EPS of $1.18 vs. a consensus of $2.42B and $1.10. However, full-year guidance is more mixed: Cognizant expects revenue of at least $10.3B and EPS of at least $5.02 vs. a consensus of $10.38B and $4.77.
- The company has also announced a 2-for-1 stock split. Shares will begin trading on a post-split basis on March 8.
- 5K workers were added in Q4, raising Cognizant's total headcount to 171.4K. SG&A spend +12.1% Y/Y to $450.5M, less than revenue growth of 20.9%.
- Rivals Infosys (INFY -1.7%) and Wipro (WIT -1.3%) are following Cognizant lower.
- Q4 results, PR
Jan. 17, 2014, 9:13 AM
Jan. 10, 2014, 11:48 AM
- Infosys (INFY +5.3%) has jumped to levels last seen in early 2012 after posting strong FQ3 results and upping its FY14 (ends March '14) revenue growth forecast to 11.5%-12% from a prior 9%-10%. Rival Wipro (WIT +2.7%) is also higher.
- Infosys' CC commentary (transcript) was moderately upbeat. CEO S.D. Shibulal says his company's business environment "has improved marginally in most business segments" and that clients are "becoming more confident about spending." But he adds customers "remain careful" with regards to spending decisions, and that Infosys 2014 customer budgets to be flat Y/Y.
- Overall pricing is said to be "stable," though price pressure exists for major outsourcing deals and "commoditized services." Clients in the key financial services vertical are said to be focused on cost optimization, something the outsourcing giant expects to benefit from.
- Infosys now has 495 $1M+ clients, up from 469 at the end of FQ2. Its top 10 clients account for 23.5% of revenue.
- FQ3 opex growth was 7.3% Y/Y, slightly less than revenue growth of 9.9%. Gross margin was 36.1%, -90 bps Y/Y.
- Shares also rallied following Infosys' October FQ2 beat.
Wipro Ltd. is a global information technology, consulting and outsourcing company. The company develops and integrates solutions that enable clients to leverage Information Technology (IT) in achieving their business objectives at competitive costs. It operates its business through two segments... More
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