Cognizant Down 6% Despite Earnings Beat

Shares of Cognizant Technology Solutions ($CTSH) are down about 6% this morning after the IT provider’s earnings report. For Q1, CTSH earned 62 cents per share which was seven cents better than estimates. That’s up from 51 cents per share a year ago. Quarterly revenue rose 19.9% to $2.42 billion.

For Q2, the company sees revenues between $2.50 billion and $2.53 billion, and EPS of 62 cents. The Street had been expecting 63 cents per share. For all of 2014, they project revenues of at least $10.3 billion and earnings of $2.54 per share. Three months ago, CTSH had disappointed investors when they projected 2014 earnings of at last $2.51 per share (that’s post-split), while the Street had expected $2.54 per share.

“Cognizant continues to be well positioned to help clients as they face the secular shifts impacting their businesses,” said Francisco D’Souza, Chief Executive Officer. “Our broad set of capabilities and our compelling value proposition enable Cognizant to help clients simultaneously ‘run better’ and ‘run different,’ by not only driving efficiency in their current operations, but also helping them to re-imagine and re-design their business models.”

“We remain confident in the overall demand environment and in our ability to deliver our previously stated revenue guidance of at least $10.3 billion for 2014, up at least 16.5% over 2013,” said Gordon Coburn, President. “Our strategy of re-investing in our business to build strength across all of our growth horizons is clearly paying off. As the impact of digital technologies increasingly becomes a CEO level agenda item, Cognizant is well positioned to capitalize on this trend.”

These numbers look pretty good, and there’s not much surprising here. I don’t see what can justify today’s sell-off, but I’ve never understood short-term moves.

Posted by on May 7th, 2014 at 10:49 am


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