Cognizant Gives Weak Forecast As Clients Cut Spending

IT services provider Cognizant Technology Solutions Corp forecast weaker-than-expected revenue for the current quarter as its healthcare and financial clients cut spending amid stiff competition.

The company's shares were slightly down in premarket trading on Friday.

Cognizant said it expected third-quarter revenue in the range of $3.43 billion to $3.47 billion. Analysts had expected revenue of $3.54 billion, according to Thomson Reuters I/B/E/S.

Revenue from its business that caters to the financial services industry rose 8.1 per cent to $1.35 billion, accounting for more than a third of its total revenue.

Healthcare services revenue rose 6.9 per cent to $958.8 million in the quarter.

Total revenue rose 9.2 per cent to $3.37 billion, driven by strong demand for its cloud services.

However, the company's net income fell to $252.4 million, or 41 cents per share, in the quarter ended June 30 from $420.1 million, or 68 cents per share, a year earlier.

Excluding items, the company earned 87 cents per share, above the average analyst estimate of 82 cents per share.

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