New Delhi: IT company Cognizant has reported over 15 per cent drop in net income for the quarter ended March, and slashed its full-year revenue growth outlook.
The US-headquartered company, which has a significant portion of its employees based in India, revised its full-year 2019 revenue growth outlook to 3.6-5.1 per cent in constant currency, significantly less than 7-9 per cent projected just months ago.
Cognizant follows January-December as financial year.
It cited "first quarter underperformance" and likelihood of slower growth in financial services and healthcare as reasons for the massive cut in full-year outlook.
The first quarter net income at $441 million was 15 per cent lower than $520 million clocked in the year-ago period. The quarterly revenue rose to $4.11 billion, up 5.1 per cent (6.8 per cent in constant currency) from the year-ago period - missing the company's own estimates.
"Cognizant's growth and performance in the quarter leave room for improvement," Brian Humphries, Chief Executive Officer of Cognizant, said in a statement.
Humphries, who took over the baton from the Francisco D'Souza on April 1, admitted that the company, despite its client centricity and innovative spirit, is not yet delivering against the market opportunity.
"While I am encouraged by our client centricity, our employees' winning spirit and our innovation, we are not yet delivering against the market opportunity. We are committed to strengthening our execution to invest in growth and drive shareholder value," Humphries added.
Cognizant said its second quarter 2019 year-over-year revenue growth is estimated to be in the range of 3.9-4.9 per cent in constant currency.
"Our revised full-year outlook reflects the first-quarter underperformance and expectations of slower growth in financial services and healthcare for the remaining 2019," Karen McLoughlin, Chief Financial Officer said.
In the coming quarters, the company intends to bring cost structure closer in line with the revised revenue expectations but will continue to invest in growth, talent, and innovation, McLoughlin said.