Cognizant Q2 net profit up 11.6% to $509 mn

IT major Cognizant on Thursday posted 11.6 percent increase in net profit to USD 509 million for June 2019 quarter and said it expects 3.9-4.9 percent growth in annual revenue this year. The US-based company, which has a significant portion of its workforce based in India, had posted a net profit of USD 456 million in the year-ago period, Cognizant said in a statement.

Its revenue grew 3.4 percent to USD 4.14 billion in the second quarter of 2019, compared to USD 4 billion in the year-ago period. The top line rose 4.7 percent on a constant currency basis, meeting the guidance of 3.9-4.9 percent growth in the June 2019 quarter. For the July-September quarter, Cognizant expects its revenues to be 3.8-4.8 percent in constant currency, while for the full year, the top line is forecast to grow by 3.9-4.9 percent.

"We are taking the necessary steps to position Cognizant for improved commercial and financial performance. While there is lots of work ahead, I am encouraged by what I have seen to date and am optimistic on our future," Cognizant Chief Executive Officer Brian Humphries said. Cognizant CFO Karen McLoughlin said the second-quarter results were in-line with its guidance, and the company is set to achieve its full-year outlook.

"We are implementing actions in the second half of the year that we expect will lower our existing cost structure and allow for greater investment in growth, talent, and digital solutions. Using our strong balance sheet we returned over USD 1.1 billion to shareholders in the second quarter," McLoughlin said. Cognizant saw its financial services segment - which accounted for close to 36 percent of the company's revenues - posting 1.7 percent growth in constant currency terms. Its total headcount stood at 2,88,200 people at the end of June 2019 quarter.