New Jersey headquartered, India-centric offhsore services firm Cognizant, hit the right numbers in Q1, though management did not venture to change its outlook for the FY. This is actually good news given industry concern over the impact of the US government's proposed visa legislation.
Headline revenues for the 3 months to 31st March jumped 18% to $2.02bn, nearly 4% higher than the prior quarter. This included an $8m contribution from Hamburg-headquartered IT services ‘mini-conglomerate’ C1 Group, bits of which were acquired at the end of last year (see Cognizant takes a few slices of German C1). As ever, EBIT margins stayed within range at 18.1%, albeit a half-point lower yoy and 20bps off Q4 2012.
Management is expecting faster growth this quarter, 19% yoy, which gives some confidence that the company is on track to achieve the 17% FY growth predicted last quarter (see Cognizant sets sights on slower 2013) and confirmed with these results. This is despite continued 'pockets of weakness' (mainly in Life Sciences) alluded to by CEO Francisco D'Souza.
We'll have much more to write about the India-centric IT services players – including their UK performance - in the next edition of OffshoreViews.