Cognizant Yields Favorable 4Q

Leading information technology services provider Cognizant Technology Solutions Corporation (CTSH - Analyst Report) reported its fourth quarter financial results of fiscal 2011. On a non-GAAP basis, net income came in at $240.1 million or 84 cents per share compared with $206.2 million or 70 cents per share in the year-ago quarter and $227.1 million or 80 cents per share (non-GAAP) in the previous quarter. Earnings per share were well ahead of the Zacks Consensus Estimate of 77 cents.

For the full year 2011, on a non-GAAP basis, net income came in at $883.6 million or $3.07 per share versus $733.5 million or $2.51 per share in 2010.

The company reported revenues of $1.66 billion in the fourth quarter of 2011, up 26.9% year over year and 3.9% sequentially. Results were in line with the Zacks Consensus Estimate and management's expectations. Sales in 2011 amounted to $6.12 billion, increasing 33.3% year over year and marginally surpassing management’s expectation of $6.11 billion.

Operating margin came in at 20.1%, up from 19.8% both in the prior quarter and prior-year quarter. This surpassed management’s earlier expectations of 19% - 20%.

Cognizant ended the quarter with cash and cash equivalents of $1.31 billion, up from $1.18 billion at the end of the prior quarter. Accounts payable reduced to $72.2 million from $78.2 million at the end of the prior quarter.

The company is happy with its final quarter performance on the back of cost efficiencies attained, technological advancements and most importantly, continued faith of its loyal customers which remains its most profitable growth driver.

Management expects revenues of at least $1.7 billion in the first quarter of 2012. Non-GAAP earnings per share are projected at 85 cents. For the full year 2012, management expects revenues to rise at least 23% annually to $7.53 billion and non-GAAP earnings per share to be at least $3.69.

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