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Cognizant cuts outlook

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Francisco D'Souza, Cognizant CEO

New Jersey: US IT consultancy Cognizant has reported first quarter revenue up 2.9% on the fourth quarter of 2011 and up 24.8% year-on-year, but it has trimmed its outlook for full fiscal 2012.

Highlights — First Quarter to March 31 2012

  • Revenue rose to $1.71 billion, up 24.8%.
  • Pre-tax profit up 15% to $322 million
  • European growth rate half that of US
  • Net headcount addition for the quarter was approximately 2,800

"Due to a slower than anticipated acceleration in demand as we entered the second quarter, we are adopting a more conservative stance for the remainder of the year and revising our guidance to at least 20% revenue growth for 2012," said Francisco D'Souza, Chief Executive Officer of Cognizant.

"We continue to believe that we have the right portfolio of services to sustain our industry leading growth and also meet the changing demands in the market as clients continue to grapple with their dual mandates of cost containment and innovation/business transformation."

"Our solid performance this quarter validates our strategy of continually reinvesting in our business to broaden and strengthen our service offerings," said Gordon Coburn, President.

"We continue to have a healthy long-term outlook for the business. Our clients recognize that in Cognizant, they have a partner with a strong consulting oriented and industry focused front-end team combined with a best-in-class global delivery model."

In the UK, first quarter revenue was up 10.7% to $180 million and in the rest of Europe revenue rose 11.4% to $103 million. US revenue was up 27% to $1.3 billion.

2012 Outlook — Second Quarter and Full Year

In February Cognizant reported 2011 revenue up 33% to $6.12 billion, and said it expected 2012 revenue to grow by at least 23%. The Company is now providing the following guidance:

  • Second quarter 2012 revenue anticipated to be at least $1.79 billion.
  • Fiscal 2012 revenue expected to be at least $7.34 billion, up at least 20% compared to 2011.

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