Cognizant Earns $1.13 per Share

We had one Buy List earnings report this morning. Cognizant Technology Solutions (CTSH) reported Q4 earnings of $1.13 per share. That’s a pretty good number. It’s up from $1.03 per share for Q4 2017, and it beat the company’s own forecast. Three months ago, the IT-outsourcer told us to expect earnings of at least $1.05 per share. Wall Street had been expecting $1.06 per share. In constant currency, quarterly revenue rose 8.8%.

“Cognizant executed well in 2018, diversifying our revenue base and client roster, and investing to build distinctive leadership in six advanced digital capabilities,” said Francisco D’Souza, Vice Chairman and Chief Executive Officer. “Forming the core of our digital strategy, these capabilities are instrumental in helping clients digitize and transform their entire enterprises, which we call being digital at scale. Digital continues to permeate and power every industry, creating a substantial market opportunity for us across the industries, geographies, and buyer groups we serve. With a disciplined plan for executing our digital strategy, we’ve set Cognizant up for the next stage of sustainable strong growth and value creation.”

For the year, Cognizant made $4.57 per share. Just a reminder that CTSH originally said they expected to make at least $4.53 this year. Then in May, they lowered that to $4.47, and Wall Street freaked out. We ignored it. Three months ago, they raised their full-year forecast to $4.50 per share, and it turns out, they beat that by seven cents per share. For the year, the company’s operating margin was 20.7%. I like that. They’ve previously said that their long-term target is for 21%.

Now let’s look at guidance. For 2019, Cognizant sees earnings of at least $4.40 per share. Wall Street had been expecting $4.45 per share.

The other big news from Cognizant is that Brian Humphries will be taking over as CEO on April 1 from Francisco D’Souza who has been CEO since 2007. D’Souza has done a great job, and he’ll remain a member of the board.

Posted by on February 6th, 2019 at 8:56 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.