November 4, 2015 / 11:15 AM / in 3 years

Cognizant raises revenue forecast for third time this year

(Reuters) - IT services provider Cognizant Technology Solutions Corp (CTSH.O) raised its full-year revenue forecast for the third time this year after posting its biggest jump in quarterly revenue in three years.

The company’s 23.5 percent rise in third-quarter revenue was driven by increased spending by clients in the healthcare and financial sectors in North America.

The healthcare unit has led Cognizant’s growth in the past year, driven by its $2.7 billion acquisition of U.S. healthcare IT services provider TriZetto Corp and the implementation of the U.S. Affordable Care Act, or Obamacare.

Revenue from the company’s healthcare division rose about 43 percent to $939.2 million, accounting for about 30 percent of total revenue.

The business provides services such as claims processing, billing and call center operations to insurers, hospitals and some state-run healthcare exchanges set up under Obamacare.

Revenue from the company’s financial services business, its biggest, rose 18.6 percent to $1.28 billion.

Cognizant raised its full-year adjusted profit forecast to at least $3.03 per share from $3 per share.

The company also raised its 2015 revenue view to at least $12.41 billion, a 21 percent jump from total revenue of $10.26 billion in 2014. The previous forecast was $12.33 billion.

Analysts on average were expecting a full-year profit $3.04 per share and revenue of $12.40 billion, according to Thomson Reuters I/B/E/S.

The company’s net income rose 11.7 percent to $397.2 million, or 65 cents per share in the third quarter. Excluding items, profit was 76 cents per share - in line with estimates.

Cognizant’s total revenue rose 23.5 percent to $3.19 billion, beating the average analyst estimate of $3.16 billion.

Up to Tuesday’s close, Cognizant’s stock had risen about 30 percent this year, compared with an 8 percent increase in the S&P 500 IT Services index .SPLRCITCS.

Reporting by Abhirup Roy in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty

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