Cognizant posts plunge in profit by 29 pc

Cognizant

In the light of Corona crisis, IT major Cognizant Technology Solutions Corp. on Thursday posted a nearly 29% y-o-y decline in net profit at $361 million for the second quarter ended June.  Cognizant also announced that Jan Siegmund will be appointed chief financial officer (CFO), effective 1 September.

The Teaneck, New Jersey-based firm’s revenue for the first quarter stood at $4 billion, down 3.4% from the year-ago quarter including a negative 210 basis points impact from the exit of certain content services business and the ransomware attack.

Cognizant expects its full year 2020 revenue to be in the range of $16.4-16.7 billion, or a decline of 2.0-0.5% on constant currency basis. This assumes an estimate of a negative 20 basis points foreign exchange impact and a negative 110 basis points impact from the exit of certain content services business.

The operating margin for the fourth quarter stood at 14.1% down from 15.1% in the preceding quarter.

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Cognizant’s digital business continues to make progress as it grew 14% y-o-y in the June quarter and now represented 42% of the total revenues.

Revenue from financial services (34.9% of revenue) declined 5.2% y-o-y driven by declines in both banking and insurance. Healthcare (28.9% of revenue) grew 2.0% y-o-y driven by increases from life sciences clients, specifically by revenues from our acquisition of Zenith.