Wed, Feb. 4, 10:05 AM
- Cognizant (NASDAQ:CTSH) expects Q1 revenue of at least $2.88B and EPS of at least $0.69 vs. a consensus of $2.88B and $0.70. Full-year guidance is for revenue of at least $12.21B and EPS of at least $2.91 vs. a consensus of $12.31B and $2.99. Given many other enterprise IT companies have also provided soft guidance due to forex pressures, the numbers are being taken in stride.
- Q4 revenue would've been up 13% Y/Y (rather than a reported 16.4%) if not for the TriZetto acquisition. As one would expect, the dollar's gains against the pound and euro took a toll - the U.K. was 10.2% of Q4 revenue, and the rest of Europe 7.2%. North America was 77.8%, and all other markets 4.9%.
- Segment performance: Financial services revenue (40.9% of total) +12.4% Y/Y to $1.12B. Healthcare (28.2% of total, boosted by TriZetto) +26% to $773M. Manufacturing/retail/logistics (19.5% of total) +9% to $534M. Everything else (11.5% of total) +23.3% to $314M.
- Gross margin was 40.2%, up fractionally Y/Y. Thanks in part to TriZetto, SG&A spend rose 25% to $562.6M, and op. margin fell to 19.4% from 20.7%.
- Shares have rallied to new 52-week highs.
- Q4 results, PR
Wed, Feb. 4, 6:02 AM| 1 Comment
Tue, Feb. 3, 5:30 PM
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
Nov. 5, 2014, 8:20 AM
- Cognizant (NASDAQ:CTSH) expects Q4 revenue of $2.61B-$2.64B and EPS of at least $0.63; that's better than a consensus of $2.58B and $0.59.
- Gross margin fell 90 bps Y/Y in Q3 to 39.2%, and GAAP SG&A spend rose 14% to $506M. Op. margin fell 90 bps to 19.5%, but was within a 19%-20% target range.
- Q3 segment performance: Financial services revenue +13.4% to $1.08B; healthcare +9.2% to $655.4M; manufacturing/retail/logistics +8.6% to $533M; other segments +19% to $310.3M.
- Q3 regional performance: North America +11.1% to $1.98B; U.K. +12.4% to $277M; rest of Europe +16% to $195.1M; rest of world +18.2% to $127.7M.
- Q3 results, PR
Nov. 5, 2014, 6:01 AM| Comment!
Nov. 4, 2014, 5:30 PM
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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
Aug. 6, 2014, 6:01 AM| Comment!
Aug. 5, 2014, 5:30 PM
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May. 7, 2014, 3:39 PM
- In addition to missing Q1 revenue estimates while beating on EPS, Cognizant (CTSH -4.9%) has guided for Q2 revenue of $2.5B-$2.53B and EPS of $0.62 vs. a consensus of $2.54B and $0.58. Full-year guidance follows the same pattern: Revenue of at least $10.3B and EPS of at least $2.54 vs. a consensus of $10.38B and $2.36.
- On the CC (transcript), Cognizant noted it faced Q1 "headwinds" in North America. Among them: Weak healthcare spending blamed on Obamacare and client leadership transitions, and "general economic and weather-related disruptions."
- Segment breakdown: Financial services revenue +19.7% Y/Y to $1.02B, Healthcare +20.8% to $616M, manufacturing/retail/logistics +20% to $511.3M, everything else +18% to $271M.
- Geographic breakdown: North America +16.1% to $1.84B, Europe +35% to $470.1M, rest of world +28.4% to $116M.
- The EPS beat was fueled by a 90 bps Y/Y increase in op. margin to 20.8% (above Cognizant's target range of 19%-20%. Headcount rose by 7.2K Q/Q.
May. 7, 2014, 6:00 AM| Comment!
May. 6, 2014, 5:30 PM
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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
Feb. 5, 2014, 6:02 AM| 2 Comments
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