Cognizant's profit beats estimates as Europe revenue rises

Technology outsourcing company Cognizant Technology Solutions Corp reported a better-than-expected profit for the first quarter as customers in Europe raised their IT spending.

Quarterly revenue from Europe rose 35 per cent, the strongest growth since the company started breaking out revenue by region two years ago.

The Teaneck, New Jersey-based company's revenue from the region grew 22.7 per cent in the year-earlier quarter.

Europe contributed $470.1 million, or 19.4 per cent, to total revenue in the quarter ended March 31.

Revenue growth in North America, Cognizant's biggest market, slowed slightly to 16.1 per cent, to $1.84 billion, after rising 16.3 per cent in the first quarter of 2013.

India-based rivals Tata Consultancy Services Ltd and Infosys Ltd also reported better-than-expected profit for the quarter ended March.

Cognizant's net income rose to $348.9 million, or 57 cents per share, in the first quarter from $284.2 million, or 47 cents per share, a year earlier.

Revenue rose about 20 per cent to $2.42 billion.

Analysts on average had expected earnings of 55 cents per share on revenue of $2.43 billion, according to Thomson Reuters I/B/E/S.

Cognizant forecast revenue of $2.50 billion to $2.53 billion for the current quarter, slightly below the average analyst estimate of $2.54 billion.

The company said it continued to expect revenue to grow by at least 16.5 per cent to $10.3 billion this year. Cognizant forecast full-year adjusted earnings of at least $2.54 per share.