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Infosys' (INFY) Q1 Earnings and Revenues Beat Estimates
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Infosys Limited's (INFY - Free Report) first-quarter fiscal 2021 adjusted earnings of 13 cents per share came in a penny higher than the Zacks Consensus Estimate. Moreover, quarterly earnings came in line with the year-ago figure of 13 cents.
Though revenues of $3.12 billion edged down 0.3% year over year, the reported figure surpassed the Zacks Consensus Estimate of $2.96 billion. In terms of constant currency (CC), the metric was up 1.5%.
Rise in large deal wins and fast-growing digital services were key catalysts. Solid demand for its services in cloud, IoT, cyber security, SaaS, user experience, data and analytics is a major driver.
Digital Revenues (44.5% of total) climbed 24.2% year over year (25.5% at cc) to $1.39 billion, while Core Revenues (55.5%) declined 13.9% (down 11.8% at cc) to $1.73 billion.
Geographically, Europe and India revenues were up 1.5% and 23.3%, respectively. North America and Rest of the World declined 0.5% and 7.4%, respectively.
Segment wise, Hi Tech registered maximum growth of 13.4% at cc. Life Sciences, Financial Services, and Manufacturing rose 7.7%, 2.1% and 0.3%, respectively. However, Retail, Communication, and Energy, Utilities, Resources & Services recorded a decline of 7.4%, 0.7% and 0.2%, respectively.
In the fiscal first quarter, the company added 110 clients. It also signed multiple large deals of contract value (TCV) worth $1.74 billion.
Though headwinds in the financial services segment are still a concern, growing traction in the commercial and corporate bank, consumer, cost and payments, wealth management and custody plus mortgage portfolios of its business is an upside.
The company reported that its clients worth more than $100 million now add up to 25.
Gross profit climbed 4.1% year over year to $1.05 billion. Gross margin increased 140 basis points (bps) on a year-over-year basis to 33.6%.
The company’s operating income grew 10.1% year over year to $708 million. Operating margin expanded 220 bps to 22.7%.
Infosys ended the fiscal first quarter with cash and cash equivalents of $2.515 billion, up from the fourth-quarter fiscal 2020 level of $2.465 billion.
Zacks Rank and Stocks to Consider
Currently, Infosys carries a Zacks Rank #4 (Sell).
The long-term earnings growth rate for Zoom Video Communications, Fortinet and Dropbox is currently pegged at 25%, 14% and 32.5%, respectively.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Infosys' (INFY) Q1 Earnings and Revenues Beat Estimates
Infosys Limited's (INFY - Free Report) first-quarter fiscal 2021 adjusted earnings of 13 cents per share came in a penny higher than the Zacks Consensus Estimate. Moreover, quarterly earnings came in line with the year-ago figure of 13 cents.
Though revenues of $3.12 billion edged down 0.3% year over year, the reported figure surpassed the Zacks Consensus Estimate of $2.96 billion. In terms of constant currency (CC), the metric was up 1.5%.
Rise in large deal wins and fast-growing digital services were key catalysts. Solid demand for its services in cloud, IoT, cyber security, SaaS, user experience, data and analytics is a major driver.
Infosys Limited Price, Consensus and EPS Surprise
Infosys Limited price-consensus-eps-surprise-chart | Infosys Limited Quote
Quarterly Details
Digital Revenues (44.5% of total) climbed 24.2% year over year (25.5% at cc) to $1.39 billion, while Core Revenues (55.5%) declined 13.9% (down 11.8% at cc) to $1.73 billion.
Geographically, Europe and India revenues were up 1.5% and 23.3%, respectively. North America and Rest of the World declined 0.5% and 7.4%, respectively.
Segment wise, Hi Tech registered maximum growth of 13.4% at cc. Life Sciences, Financial Services, and Manufacturing rose 7.7%, 2.1% and 0.3%, respectively. However, Retail, Communication, and Energy, Utilities, Resources & Services recorded a decline of 7.4%, 0.7% and 0.2%, respectively.
In the fiscal first quarter, the company added 110 clients. It also signed multiple large deals of contract value (TCV) worth $1.74 billion.
Though headwinds in the financial services segment are still a concern, growing traction in the commercial and corporate bank, consumer, cost and payments, wealth management and custody plus mortgage portfolios of its business is an upside.
The company reported that its clients worth more than $100 million now add up to 25.
Gross profit climbed 4.1% year over year to $1.05 billion. Gross margin increased 140 basis points (bps) on a year-over-year basis to 33.6%.
The company’s operating income grew 10.1% year over year to $708 million. Operating margin expanded 220 bps to 22.7%.
Infosys ended the fiscal first quarter with cash and cash equivalents of $2.515 billion, up from the fourth-quarter fiscal 2020 level of $2.465 billion.
Zacks Rank and Stocks to Consider
Currently, Infosys carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader technology sector are Zoom Video Communications (ZM - Free Report) , Fortinet (FTNT - Free Report) and Dropbox (DBX - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Zoom Video Communications, Fortinet and Dropbox is currently pegged at 25%, 14% and 32.5%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>