Cognizant Technology Solutions is aiming to join the $10-billion club this year, with a growth forecast of 16.5% over 2013 that some analysts felt was conservative.
Teaneck, New Jersey headquartered Cognizant said fourth-quarter profit rose to $324.3 million, buoyed by strong orders in the financial services, healthcare and manufacturing space. That was a 16.3% increase on the year-earlier quarter, according to a company statement.
Cognizant’s full-year revenue growth guidance is seen as the benchmark for the IT industry as the company has traditionally grown 5% to 10% above its India-based peers such as Tata Consultancy Services BSE -1.60 %, Infosys BSE -0.97 % and Wipro BSE 0.89 %.
If the company meets its guidance, it will hit $10.3 billion in the current calendar year, which is also its fiscal year. Revenue for the current quarter ending March 31, will be at least $2.42 billion, Cognizant said. Revenue for the December quarter was up 20.9% to $2.355 billion from $1.948 billion in the same quarter of 2012.”The Q4 results were in line with consensus (we expected to be above) and 2014 guidance was lower than the Street, albeit, likely viewed as conservative. Growth was primarily driven by financial services and healthcare,” Baird Equity Research said in a note.
For the full year, the company said that net income was $1.2 billion, or $4.03 per diluted share, compared to $1.1 billion, or $3.44 per diluted share, for 2012.Cognizant had given an initial 2013 guidance of at least 16% for organic revenue growth (and 17%, including 1% from acquisitions). The company had revised this higher in the subsequent quarters and ended the year with 20.4% growth to $8.8 billion.
In Q4, Consulting and Technology Services grew 20% year-over-year and 1% sequentially. Outsourcing Services grew 22% year-over-year and 4% sequentially. For the full year, consulting and technology services grew 18%, and Outsourcing Services grew 23%. The headcount increased by 5,000 during the quarter, taking the total tally to 1,71,400 employees. Cognizant has about 75% of its staff in India.
The board of directors of Cognizant has declared a twofor-one stock split on its Class A common stock in the form of a 100% stock dividend. According to this, stockholders of record as of February 21, 2014, will be entitled to one additional share of Class A common stock for each share held on the record date.