February 5, 2014 / 11:20 AM / 4 years ago

Cognizant sees slower-than-expected revenue growth in 2014

(Reuters) - IT services provider Cognizant Technology Solutions Corp forecast a slower-than-expected revenue growth for the current fiscal, after reporting a fourth-quarter results that matched market estimates.

Shares of Cognizant, which also announced a two-for-one stock split, fell 5 percent in trading before the bell.

The company said it expects revenue to grow at least 16.5 percent in fiscal 2014, the slowest growth since 2009 and lower than the 20.4 percent growth in 2013.

Analysts were expecting Cognizant to grow revenue by 17-20 percent in 2014 due to higher demand from Europe and for healthcare services.

Last month, India’s top IT services provider Tata Consultancy Services Ltd said it expected sales growth to accelerate in its financial year ending March 2015.

Infosys Ltd lifted its sales growth outlook for this fiscal year on signs of an economic revival in the United States and Europe.

Cognizant’s net income rose to $324.3 million, or $1.06 per share, in the fourth quarter ended December 31, from $278.8 million, or 92 cents per share, a year earlier.

Revenue rose 21 percent to $2.36 billion, helped by a 22.1 percent rise in revenue from its financial services business.

Analysts on average had expected the company to earn $1.06 per share on revenue of $2.36 billion, according to Thomson Reuters I/B/E/S.

The company’s forecast revenue of at least $10.3 billion in fiscal 2014, lower than the analysts’ average estimate of $10.38 billion.

Cognizant also declared a two-for-one stock split on its Class A shares in the form of a stock dividend.

The company’s shares fell to $92.00 in trading before the bell. The stock closed at $97.01 Tuesday on the Nasdaq.

Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Saumyadeb Chakrabarty and Savio D'Souza

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