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January 13, 2011, 7:21 AM EST
By Ketaki Gokhale
(Updates with closing share price in fifth paragraph.)
Jan. 13 (Bloomberg) -- Infosys Technologies Ltd., India’s second-largest software-services exporter, posted third-quarter profit that missed analysts’ estimates, sending the shares to their biggest decline in more than 1 1/2 years.
Net income rose 14 percent to 17.8 billion rupees ($395 million) in the three months ended in December, Bangalore-based Infosys said today. That compares with the 18.2 billion rupee average of 27 analyst estimates compiled by Bloomberg.
The company forecast fourth-quarter earnings that lagged behind analysts’ estimates and Chief Executive Officer S. Gopalakrishnan said weaker economic recovery in developed markets, high unemployment and the risk of sovereign defaults may undermine industry growth. Infosys, the first among India’s major computer-services companies to report earnings, led the benchmark Sensitive Index lower.
“Expectations were high and they have not been met,” said Rahul Jain, a Mumbai-based analyst at Dolat Capital Market Ltd. “The stock could witness some selling pressure in the near- term,” said Jain, who rates Infosys shares “accumulate.”
Infosys declined 5.1 percent, the most since May 2009, to 3,205.20 rupees at the 3:30 p.m. close in Mumbai trading. The stock, which gained 32 percent last year outpacing the Sensex’s 17 percent advance, was the worst performer today on the index, dragging it 1.8 percent lower. Industry leader Tata Consultancy Services Ltd. jumped 55 percent in 2010.
Guidance Disappoints
Infosys, which designs and builds software programs, maintains computers and provides back-office support for clients including Microsoft Corp. and BT Group Plc, said revenue rose 24 percent to 71.1 billion rupees. That compares with the 71.8 billion rupee average of analysts’ estimates.
The software provider said it expects earnings per share in the fourth quarter ending March to range from 31.06 rupees to 31.28 rupees. That’s below the 33.5 rupees-a-share average of three analyst estimates compiled by Bloomberg.
Growth in global technology spending may slow to 5.1 percent this year from 5.4 percent in 2010 given “continued macroeconomic uncertainty,” Stamford, Connecticut-based research company Gartner Inc. forecast in a Jan. 6 statement.
“The sovereign debt risk could spill over to the U.S.” as the nation considers raising its borrowing limit, Chief Financial Officer V. Balakrishnan said today. “So markets are going to be concerned about sovereign risk not just in Europe, even in the U.S.” leading to volatility in currencies, he said.
The software-services provider said it derived 65 percent of its revenue from companies in North America, down from 67 percent a year earlier. Customers in Europe accounted for 22 percent of sales, little changed from the prior period. Infosys added 40 clients during the quarter, ending with a total of 612 customers.
Infosys added 5,311 employees last quarter, raising the total to 127,779 workers, according to the statement.
Tata Consultancy, which is scheduled to disclose results on Jan. 17, may report net income of 21.9 billion rupees according to the average of 20 analysts’ estimates compiled by Bloomberg.
--Editors: Suresh Seshadri, Young-Sam Cho.
To contact the reporter on this story: Ketaki Gokhale in Mumbai kgokhale@bloomberg.net.
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
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(Updates with closing share price in fifth paragraph.)
Jan. 13 (Bloomberg) -- Infosys Technologies Ltd., India’s second-largest software-services exporter, posted third-quarter profit that missed analysts’ estimates, sending the shares to their biggest decline in more than 1 1/2 years.
Net income rose 14 percent to 17.8 billion rupees ($395 million) in the three months ended in December, Bangalore-based Infosys said today. That compares with the 18.2 billion rupee average of 27 analyst estimates compiled by Bloomberg.
The company forecast fourth-quarter earnings that lagged behind analysts’ estimates and Chief Executive Officer S. Gopalakrishnan said weaker economic recovery in developed markets, high unemployment and the risk of sovereign defaults may undermine industry growth. Infosys, the first among India’s major computer-services companies to report earnings, led the benchmark Sensitive Index lower.
“Expectations were high and they have not been met,” said Rahul Jain, a Mumbai-based analyst at Dolat Capital Market Ltd. “The stock could witness some selling pressure in the near- term,” said Jain, who rates Infosys shares “accumulate.”
Infosys declined 5.1 percent, the most since May 2009, to 3,205.20 rupees at the 3:30 p.m. close in Mumbai trading. The stock, which gained 32 percent last year outpacing the Sensex’s 17 percent advance, was the worst performer today on the index, dragging it 1.8 percent lower. Industry leader Tata Consultancy Services Ltd. jumped 55 percent in 2010.
Guidance Disappoints
Infosys, which designs and builds software programs, maintains computers and provides back-office support for clients including Microsoft Corp. and BT Group Plc, said revenue rose 24 percent to 71.1 billion rupees. That compares with the 71.8 billion rupee average of analysts’ estimates.
The software provider said it expects earnings per share in the fourth quarter ending March to range from 31.06 rupees to 31.28 rupees. That’s below the 33.5 rupees-a-share average of three analyst estimates compiled by Bloomberg.
Growth in global technology spending may slow to 5.1 percent this year from 5.4 percent in 2010 given “continued macroeconomic uncertainty,” Stamford, Connecticut-based research company Gartner Inc. forecast in a Jan. 6 statement.
“The sovereign debt risk could spill over to the U.S.” as the nation considers raising its borrowing limit, Chief Financial Officer V. Balakrishnan said today. “So markets are going to be concerned about sovereign risk not just in Europe, even in the U.S.” leading to volatility in currencies, he said.
The software-services provider said it derived 65 percent of its revenue from companies in North America, down from 67 percent a year earlier. Customers in Europe accounted for 22 percent of sales, little changed from the prior period. Infosys added 40 clients during the quarter, ending with a total of 612 customers.
Infosys added 5,311 employees last quarter, raising the total to 127,779 workers, according to the statement.
Tata Consultancy, which is scheduled to disclose results on Jan. 17, may report net income of 21.9 billion rupees according to the average of 20 analysts’ estimates compiled by Bloomberg.
--Editors: Suresh Seshadri, Young-Sam Cho.
To contact the reporter on this story: Ketaki Gokhale in Mumbai kgokhale@bloomberg.net.
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
Webmaster Forum | SEO Forum | Coding Forum | Graphics Forum</b>