Cognizant quarterly net profit grows by 26% to $557 million

IT services major Cognizant on Friday posted a 26 per cent increase in net profit at $557 million for the quarter ended March 31, 2017.

Cognizant's net profit stood at $441 million in the first quarter of 2016.

The US-based firm saw its revenue grow 10.7 per cent to $3.55 billion in the reported quarter from $3.2 billion in the year-ago period, meeting its guidance range of $3.51-3.55 billion.

Cognizant has a large part of its 2.6 lakh-strong workforce in India.

The company has maintained its revenue forecast for the fiscal 2017 to be between $14.56-14.84 billion.

For the April-June 2017 quarter, it expects its revenues to be between $3.63 and 3.68 billion.

"We delivered solid results in the first quarter and continued to build our digital solutions portfolio, expand our skills, and enhance our engagement with clients, Cognizant CEO Francisco D Souza said.

He added that the company is making good progress in accelerating its shift to digital services and solutions, positioning it well to achieve both revenue and margin targets for this year.

Cognizant said it is "realigning" its business to accelerate shift to high-value digital transformation work, while continuing to re-assess less profitable opportunities.

As part of the process, the company plans to improve utilisation and optimise workforce to better align with client demand.

Cognizant expects to incur a majority of the total costs related to this realignment programme in 2017.

"This realignment is part of our plan to improve our non-GAAP operating margin to 22 per cent in calendar year 2019 while continuing to drive revenue growth," it said.