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Infosys (INFY) Q4 Earnings & Revenues Miss, Stock Down 10%
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Infosys (INFY - Free Report) stock plunged by 10% after the India-based IT services provider reported lower-than-expected fourth-quarter fiscal 2023 results. The company delivered fourth-quarter fiscal 2023 earnings of 18 cents per share, which missed the Zacks Consensus Estimate of 19 cents. The company’s bottom line increased merely 0.2% on a year-over-year basis.
Infosys’ fiscal fourth-quarter revenues increased 6.4% year over year to $4.55 billion, missing the Zacks Consensus Estimate of $4.73 billion. In terms of constant currency (cc), the metric was up 8.8%.
Infosys continued to fortify its industry-leading digital capabilities amid a highly volatile economic scenario. Large deal wins and market share expansion, driven by the accelerated digital transformation trend worldwide, remained the key catalysts for INFY’s growth.
Digital revenues (62.9% of the total) climbed 13.1% year over year (15% at cc) to $2.86 billion. Meanwhile, Core revenues (37.1%) declined 3.3% (down 0.2% at cc) to $1.69 billion.
Revenues across North America and Europe recorded a year-over-year increase of 5.7% and 13.9% while the Rest of the World and India recorded decrease of 1.4% and 13.3%, respectively, on a reported basis. On a cc basis, North America, Europe and the Rest of the World registered growth of 6%, 20.3% and 3.4%, respectively. However, revenues from India declined 7.1% at cc.
Segment-wise, Manufacturing registered growth of 22.2%. Life Sciences, Energy, Utilities, Resources & Services, Retail and Hi-Tech divisions jumped 14.9%, 14.3%, 10% and 3.5%, respectively. Sales in the Others business segment recorded year-over-year revenue growth of 5.9%. Financial Services and Communication units witnessed declines of 1.7% and 2.1%, respectively.
Infosys added 115 clients in the fiscal fourth quarter. It signed multiple large deals of contract values worth $2.1 billion, down from previous quarter’s $3.3 billion. The company reported that its clients, worth more than $100 million, now add up to 40, up from the year-ago quarter’s 38 and the third quarter of 2022’s 38.
Other Financial Details
Gross profits increased 4.9% year over year to $1.39 billion. However, the gross margin contracted 50 basis points (bps) on a year-over-year basis to 30.5%.
The company’s operating income inched up 4% year over year to $957 million. Meanwhile, the operating margin declined 50 bps to 21% year over year.
Infosys ended the fiscal fourth quarter with cash and cash equivalents of $1.48 billion, up from the $1.40 billion recorded at the end of the third quarter of fiscal 2023. In the fiscal fourth quarter, the company’s free cash flow was $713 million.
FY24 Outlook
For fiscal 2024, INFY expects annual revenues to grow between 4% and 7% year over year at cc.
The company estimates operating margin to be in the 20-22% range for the full fiscal.
Zacks Rank & Stocks to Consider
Infosys currently has a Zacks Rank #3 (Hold). Shares of INFY have fallen 24.7% in the past year.
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Infosys (INFY) Q4 Earnings & Revenues Miss, Stock Down 10%
Infosys (INFY - Free Report) stock plunged by 10% after the India-based IT services provider reported lower-than-expected fourth-quarter fiscal 2023 results. The company delivered fourth-quarter fiscal 2023 earnings of 18 cents per share, which missed the Zacks Consensus Estimate of 19 cents. The company’s bottom line increased merely 0.2% on a year-over-year basis.
Infosys’ fiscal fourth-quarter revenues increased 6.4% year over year to $4.55 billion, missing the Zacks Consensus Estimate of $4.73 billion. In terms of constant currency (cc), the metric was up 8.8%.
Infosys continued to fortify its industry-leading digital capabilities amid a highly volatile economic scenario. Large deal wins and market share expansion, driven by the accelerated digital transformation trend worldwide, remained the key catalysts for INFY’s growth.
Infosys. Price, Consensus and EPS Surprise
Infosys price-consensus-eps-surprise-chart | Infosys Quote
Top-Line Details
Digital revenues (62.9% of the total) climbed 13.1% year over year (15% at cc) to $2.86 billion. Meanwhile, Core revenues (37.1%) declined 3.3% (down 0.2% at cc) to $1.69 billion.
Revenues across North America and Europe recorded a year-over-year increase of 5.7% and 13.9% while the Rest of the World and India recorded decrease of 1.4% and 13.3%, respectively, on a reported basis. On a cc basis, North America, Europe and the Rest of the World registered growth of 6%, 20.3% and 3.4%, respectively. However, revenues from India declined 7.1% at cc.
Segment-wise, Manufacturing registered growth of 22.2%. Life Sciences, Energy, Utilities, Resources & Services, Retail and Hi-Tech divisions jumped 14.9%, 14.3%, 10% and 3.5%, respectively. Sales in the Others business segment recorded year-over-year revenue growth of 5.9%. Financial Services and Communication units witnessed declines of 1.7% and 2.1%, respectively.
Infosys added 115 clients in the fiscal fourth quarter. It signed multiple large deals of contract values worth $2.1 billion, down from previous quarter’s $3.3 billion. The company reported that its clients, worth more than $100 million, now add up to 40, up from the year-ago quarter’s 38 and the third quarter of 2022’s 38.
Other Financial Details
Gross profits increased 4.9% year over year to $1.39 billion. However, the gross margin contracted 50 basis points (bps) on a year-over-year basis to 30.5%.
The company’s operating income inched up 4% year over year to $957 million. Meanwhile, the operating margin declined 50 bps to 21% year over year.
Infosys ended the fiscal fourth quarter with cash and cash equivalents of $1.48 billion, up from the $1.40 billion recorded at the end of the third quarter of fiscal 2023. In the fiscal fourth quarter, the company’s free cash flow was $713 million.
FY24 Outlook
For fiscal 2024, INFY expects annual revenues to grow between 4% and 7% year over year at cc.
The company estimates operating margin to be in the 20-22% range for the full fiscal.
Zacks Rank & Stocks to Consider
Infosys currently has a Zacks Rank #3 (Hold). Shares of INFY have fallen 24.7% in the past year.
Some top-ranked stocks from the broader Computer and Technology sector are Airbnb (ABNB - Free Report) , Baidu (BIDU - Free Report) and Meta Platforms (META - 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 Baidu’s first-quarter 2023 earnings has been revised 39 cents southward to $2.21 per share over the past 30 days. For 2023, earnings estimates have risen by a penny to $11.54 per share over the past 30 days.
BIDU’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 45.5%. Shares of the company have jumped 2.4% in the past year.
The Zacks Consensus Estimate for Meta Platforms' first-quarter 2023 earnings has been revised a penny upward to $1.97 per share over the past seven days. For fiscal 2023, earnings estimates have moved north by a penny to $10.23 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 8.6%. Shares of the company have gained 4.8% in the past year.
The Zacks Consensus Estimate for Airbnb’s first-quarter 2023 earnings has been revised northward from breakeven to 14 cents per share over the past 60 days. For 2023, earnings estimates have moved up by 52 cents to $3.38 in the past 60 days.
ABNB's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 57.2%. Shares of the company have declined 33.2% in the past year.