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Infosys' (INFY) Q2 Earnings and Revenues Match Estimates
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Infosys (INFY - Free Report) reported second-quarter fiscal 2023 earnings of 18 cents per share, which matched the Zacks Consensus Estimate. The company’s bottom line increased 5.9% on a year-over-year basis.
Infosys’ fiscal second-quarter revenues increased 13.9% year over year and matched the Zacks Consensus Estimate of $4.56 billion. In terms of constant currency (cc), the metric was up 18.8%.
Infosys continued to fortify its industry-leading digital capabilities amid a highly volatile economic scenario. The company witnessed solid traction for its CobaltTM cloud portfolio and other diversified digital solutions throughout the quarter. Large deal wins and market share expansion, driven by the accelerated digital transformation trend worldwide, remained key catalysts for the company’s growth.
Digital revenues (61.8% of the total) climbed 25.6% year over year (31.2% at cc) to $2.82 billion, while Core revenues (38.2%) declined 1.1% (up 3% at cc) to $1.74 billion.
Revenues across India, North America, Europe and the Rest of the World regions recorded year-over-year increases of 28.5%, 15%, 13.8% and 4.7%, respectively, on a reported basis. On a cc basis, India, North America, Europe and the Rest of the World registered growth of 36.4%, 15.6%, 28.5% and 11.9%, respectively.
Segment-wise, Manufacturing registered growth of 34%. Life Sciences, Financial Services, Communication and Retail jumped 7.6%, 7.6%, 13.3% and 10.6%, respectively. The Energy, Utilities, Resources & Services and Hi-Tech divisions recorded year-over-year revenues of 18.6% and 9.2%, respectively. Sales in the Others business segment witnessed the highest surge of 44.3%.
Infosys added 103 clients during the fiscal second quarter. It signed multiple large deals of contract values worth $2.7 billion.
The company reported that its clients, worth more than $100 million, now add up to 39, up from the year-ago quarter’s 35 and the last reported quarter’s 38.
Other Financial Details
Gross profits climbed 4.7% year over year to $1.39 billion. However, the gross margin contracted 270 basis points (bps) on a year-over-year basis to 30.4%. The company’s operating income increased 4% year over year to $979 million. Operating margin declined 210 bps to 21.5% year over year.
Infosys ended the fiscal second quarter with cash and cash equivalents of $1.83 billion, up from the $1.78 billion recorded at the end of first-quarter fiscal 2023.
During the fiscal second quarter, the company’s free cash flow was $589 million.
Raised Outlook
For fiscal 2023, INFY now expects annual revenues to grow between 15% and 16% year over year at cc compared with the previous estimate of 14-16% year over year at cc. The company further revised its operating margin estimate to be in the 21-22% range for the full fiscal compared to the prior forecast of 21-23%.
Zacks Rank & Key Picks
Infosys currently carries a Zacks Rank #3 (Hold). Shares of the company have declined 24.7% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Keysight Technologies (KEYS - Free Report) , Digi International (DGII - Free Report) and Baidu (BIDU - 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 Zacks Consensus Estimate for Keysight's fourth-quarter fiscal 2022 earnings has been revised 10 cents north to $1.99 per share over the past 60 days. For fiscal 2022, earnings estimates have moved 30 cents north to $7.47 per share in the past 60 days.
KEYS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.32%. Shares of the company have declined 8.6% in the past year.
The Zacks Consensus Estimate for Digi’s fourth-quarter fiscal 2022 earnings has increased by 2 cents to 42 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved 3.2% up to $1.61 per share in the past 30 days.
DGII's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have increased 61.5% in the past year.
The Zacks Consensus Estimate for Baidu's third-quarter 2022 earnings has been revised 46 cents southward to $2.51 per share over the past 60 days. For 2022, earnings estimates have moved 16.2% north to $9.16 per share in the past 60 days.
Baidu's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 58.1%. Shares of BIDU have slumped 33.9% in the past year.
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Infosys' (INFY) Q2 Earnings and Revenues Match Estimates
Infosys (INFY - Free Report) reported second-quarter fiscal 2023 earnings of 18 cents per share, which matched the Zacks Consensus Estimate. The company’s bottom line increased 5.9% on a year-over-year basis.
Infosys’ fiscal second-quarter revenues increased 13.9% year over year and matched the Zacks Consensus Estimate of $4.56 billion. In terms of constant currency (cc), the metric was up 18.8%.
Infosys continued to fortify its industry-leading digital capabilities amid a highly volatile economic scenario. The company witnessed solid traction for its CobaltTM cloud portfolio and other diversified digital solutions throughout the quarter. Large deal wins and market share expansion, driven by the accelerated digital transformation trend worldwide, remained key catalysts for the company’s growth.
Infosys Limited Price, Consensus and EPS Surprise
Infosys Limited price-consensus-eps-surprise-chart | Infosys Limited Quote
Top-line Details
Digital revenues (61.8% of the total) climbed 25.6% year over year (31.2% at cc) to $2.82 billion, while Core revenues (38.2%) declined 1.1% (up 3% at cc) to $1.74 billion.
Revenues across India, North America, Europe and the Rest of the World regions recorded year-over-year increases of 28.5%, 15%, 13.8% and 4.7%, respectively, on a reported basis. On a cc basis, India, North America, Europe and the Rest of the World registered growth of 36.4%, 15.6%, 28.5% and 11.9%, respectively.
Segment-wise, Manufacturing registered growth of 34%. Life Sciences, Financial Services, Communication and Retail jumped 7.6%, 7.6%, 13.3% and 10.6%, respectively. The Energy, Utilities, Resources & Services and Hi-Tech divisions recorded year-over-year revenues of 18.6% and 9.2%, respectively. Sales in the Others business segment witnessed the highest surge of 44.3%.
Infosys added 103 clients during the fiscal second quarter. It signed multiple large deals of contract values worth $2.7 billion.
The company reported that its clients, worth more than $100 million, now add up to 39, up from the year-ago quarter’s 35 and the last reported quarter’s 38.
Other Financial Details
Gross profits climbed 4.7% year over year to $1.39 billion. However, the gross margin contracted 270 basis points (bps) on a year-over-year basis to 30.4%.
The company’s operating income increased 4% year over year to $979 million. Operating margin declined 210 bps to 21.5% year over year.
Infosys ended the fiscal second quarter with cash and cash equivalents of $1.83 billion, up from the $1.78 billion recorded at the end of first-quarter fiscal 2023.
During the fiscal second quarter, the company’s free cash flow was $589 million.
Raised Outlook
For fiscal 2023, INFY now expects annual revenues to grow between 15% and 16% year over year at cc compared with the previous estimate of 14-16% year over year at cc. The company further revised its operating margin estimate to be in the 21-22% range for the full fiscal compared to the prior forecast of 21-23%.
Zacks Rank & Key Picks
Infosys currently carries a Zacks Rank #3 (Hold). Shares of the company have declined 24.7% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Keysight Technologies (KEYS - Free Report) , Digi International (DGII - Free Report) and Baidu (BIDU - 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 Zacks Consensus Estimate for Keysight's fourth-quarter fiscal 2022 earnings has been revised 10 cents north to $1.99 per share over the past 60 days. For fiscal 2022, earnings estimates have moved 30 cents north to $7.47 per share in the past 60 days.
KEYS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.32%. Shares of the company have declined 8.6% in the past year.
The Zacks Consensus Estimate for Digi’s fourth-quarter fiscal 2022 earnings has increased by 2 cents to 42 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved 3.2% up to $1.61 per share in the past 30 days.
DGII's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have increased 61.5% in the past year.
The Zacks Consensus Estimate for Baidu's third-quarter 2022 earnings has been revised 46 cents southward to $2.51 per share over the past 60 days. For 2022, earnings estimates have moved 16.2% north to $9.16 per share in the past 60 days.
Baidu's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 58.1%. Shares of BIDU have slumped 33.9% in the past year.