After busting consensus estimates quarter after quarter, Software St’s supernova was in line or just under in October-December.
Cognizant Technology Solutions on Wednesday said revenues grew 26.9% in its fourth quarter, about $10 million under Street forecasts, while net profit rose 16.44% to $240.1 million.
The Nasdaq-listed company also guided lower January-March —or first-quarter — revenues of $1.7 billion against expectations of $1.75 billion. That’s still a good $200 million more than Wipro, which it overtook last year.
But for calendar 2012, the guidance is a stunning 23% revenue growth or$7.53 billion — better than Street estimates of $7.45 billion and twice the morose 11-14% Nasscom expects the Indian IT industry to deliver.
Achieving that will take Cognizant within kissing distance from No. 2 Infosys, which is expected to clock around $7.75 billion this year.
It also shows the enormous confidence the company has in its business model that focusses on the financial and healthcare space in times of continuing sovereign crises.
“Pricing in the fourth quarter was flat compared with the prior quarters. But for 2012, we see an upward bias, but no significant price increase,” Francisco D’Souza, CEO, told CNBC TV-18. “We are very confident of delivering 19-20% non-Gaap operating margins.”
The outlook is continued strength in North America and short-term volatility in Europe. But there’s a share-shift towards outsourcing in the continent, he alluded.
Cognizant, which derived 80% of revenues from North America, cranked out a dollar revenue growth of 3.9% or $1.66 billion in the fourth quarter compared with expectations of $1.67 billion.
US Gaap-based net profit was 78 cents a share, excluding items, or two cents more than guidance and one over consensus.
The company added 7,300 net new hires in the quarter, taking its total workforce to 137,700.
Operating margins in the quarter were 20.1%, a whisker ahead of a targeted 19-20% range.
Overall revenues rose 33.3% for the year to $6.12 billion.
The company also announced a raft of promotions to some veterans — as D’Souza put it — of the company.
CFO George Coburn has been made president, while Rajeev Mehta has been named group chief executive-industries and markets.
Chandra Sekaran has been named group chief executive - technology & operations, while Karen McLoughlin will replace Coburn as CFO. And Malcolm Frank has been named executive VP, strategy and marketing.
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