Cognizant 3Q profit rises 21 pct on higher sales

Cognizant Technology Solutions posts 21 percent jump in 3rd-qtr profit as sales advance

• On 11:22 am EST, Tuesday November 3, 2009

TEANECK, N.J. (AP) -- Information technology and outsourcing company Cognizant Technology Solutions Corp.'s on Tuesday said its third-quarter profit rose 21 percent as companies continued to seek its help cutting costs.

Results topped Wall Street estimates, and Cognizant issued guidance for the fourth quarter and the full year above analyst expectations, sending shares up in morning trading.

Cognizant said its net income rose to $136.6 million, or 45 cents per share, up from $112.8 million, or 38 cents per share, in the third quarter of 2008.

Revenue rose 16 percent to $853.5 million from $734.7 million last year.

Analysts polled by Thomson Reuters, on average, expected profit of 41 cents per share on revenue of $805.6 million.

President and CEO Francisco D'Souza said the company saw growth across all industry sectors, locations and service lines in the quarter. Clients who have sought Cognizant's help cutting costs are now using its consulting services to deal with fallout from the recession and new technological challenges, he said.

The company said it expects profit of 45 cents per share on revenue of $880 million for the fourth quarter. Analysts were expecting profit of 42 cents a share.

Cognizant also raised its full year forecast.

It now expects to earn profit of $1.75 for the year on revenue of at least $3.26 billion. That's up from prior guidance for profit of at least $1.66 per share on revenue of at least $3.14 billion.

For the year, analysts expect profit of $1.68 per share, with estimates ranging from $1.65 to $1.74. Revenue is seen coming in at $3.64 billion, with estimates ranging from $3.42 billion to $3.89 billion.

Cognizant shares rose $2.61, or 6.7 percent, to $41.41 in heavy trading, after earlier setting a 52-week high of $42.40.

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