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Cognizant Q4 revenue up 20%, Europe big driver


Cognizant Technology Solutions, which has three-fourths of its staff operating out of India, met Street expectations on Wednesday when it reported revenues of $2.42 billion for the January-March quarter 2014. 

CHENNAI: Cognizant Technology Solutions, which has three-fourths of its staff operating out of India, met Street expectations on Wednesday when it reported revenues of $2.42 billion for the January-March quarter 2014. The revenues were up 19.9% from the year-ago quarter and 2.8% from the previous quarter. Cognizant's net income came in at $348.9 million, or $0.57 per diluted share, up 22.8% y-o-y and 7.6% sequentially. 

The Teaneck, New Jersey-based Cognizant's 2.8% growth was comparable to HCL Technologies (3%). Tech giant TCS reported 1.9% growth, while Wipro witnessed 2.5% rise in revenues. However, Infosys reported 0.4% de-growth. 

Cognizant produced yet another quarter of industry-beating numbers. Its incremental revenue addition was $67 million from the previous quarter, the highest that its peer group added, with TCS coming in next at $65 million. 

On a geographical basis, revenues from North America grew 16.1% and from Europe climbed 35%. In the rest of the world, revenues increased 28.4%. Europe growth turbocharged Cognizant. Overall Europe revenues grew 9.6% sequentially and 35% y-o-y. The UK saw a strong 12.8% sequential growth and 28.2% growth y-o-y, hitting the $1 billion run rate for the first time. Continental Europe saw 5.2% sequential growth, and 46.1% growth y-o-y. 

Operating margins for the company was 20.8% during the quarter. "As expected, on a sequential basis, our pricing was stable during the first quarter," Karen McLoughlin, CFO, Cognizant said. In comparison, TCS' margins were 29.3%, Infosys 25.5%, Wipro 24.5% while HCL Tech had 24.6%. 

The company said it had added a total of 7,200 professionals during the quarter, the highest it has added in two-and-a-half years. Attrition levels were down to 14.1%.
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