Cognizant's revenue rises 10.6% to $3.83 billion in fourth quarter

1. Cognizant's revenue rises 10.6% to $3.83 billion in fourth quarter IT major Cognizant Technology Solutions Corporation on Wednesday recorded a revenue growth of 10.6 per cent at $3.83 billion during the quarter ended December 31, 2017, compared to the $3.46 billion revenue registered in the same quarter of previous year. Its revenue for the full year grew by 9.8% to $14.81 billion as compared to 13.48 billion during the previous year. For the year 2018, the company is expecting the revenue to be in the range of $16-16.30 billion, which is an 8-10 per cent growth compared to the revenue posted for the year 2017. The bottomline for the quarter ended December 2017 declined to a net loss of $18 million compared to a net income of $416 million during the same quarter a year ago. The net loss for the quarter included a one-time incremental income tax expense of $617 million related to the US Tax Cuts and Jobs Act, said the company. This is a one-time income tax expense related to the deemed repatriation tax on undistributed earnings of foreign subsidiaries. The net income for the 12 months in 2017 also declined marginally to $1.50 billion compared to $1.55 billion during the previous year. "Consistent and solid execution throughout 2017, along with continued investments to further accelerate the shift to digital during the year, gives us confidence that we can deliver a strong 2018," said Francisco D'Souza, Chief Executive Officer. "As companies that are already leaders in their industries integrate their domain knowledge with today's tremendously powerful technologies like artificial intelligence, analytics and cloud, we see a new generation of digital heavyweights emerging. Cognizant is resolved to be the go-to partner for these digital-industrial leaders and also to our fast-growing digital-native clients," he added.

2. "Our full year 2017 results reflect the successful on-going execution of our long- term strategy, which is expected to drive sustainable revenue and earnings growth while ensuring we maintain our ability to invest in the business and our financial strength and flexibility," said Karen McLoughlin, chief financial officer, Cognizant. It is expected to repurchase $1.2 billion of shares by the end of 2018, including the $300 million Accelerated Share Repurchase commenced in December 2017. "We are also evaluating the longer term impact the new US tax legislation may have on our capital return program," said the CFO. The company expects its overall effective corporate income tax rate to be approximately 24% for 2018 and 24-26% beginning in 2019. On December 22, 2017, the US enacted the Tax Reform Act, which significantly revised the US corporate income tax law, among other provisions, reducing the US federal statutory corporate income tax rate from 35 per cent to 21 per cent starting in 2018 and implementing a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The company has announced an increase in its quarterly dividend. Article By - Business Standard