Cognizant net profit falls 39 pc to US 395 mn in Q3, expects growth at 2-4 pc

The company also appointed Vinita Bali, former managing director and chief executive officer of Britannia Industries, as a new independent director, effective February 24.

The US-based company, which has a significant chunk of its workforce in India, had posted a net profit of $ 648 million in October-December 2018 quarter.

Its revenue grew 3.8 per cent to $ 4.3 billion during the quarter under review from $ 4.1 billion in the year-ago period. In constant currency terms, this translated to 4.2 per cent growth.

“Our steady progress against key initiatives is increasingly evident in our commercial and financial performance. We enter 2020 with renewed vigor and optimism,” Brian Humphries, CEO, Cognizant, said. For the full year (2019), the company’s net profit was down 12.38 per cent to $ 1.8 billion, while revenue was 4.1 per cent higher at $ 16.8 billion as compared with the previous fiscal.

Cognizant said it expects its March quarter revenue growth to be in the range of 2.8-3.8 per cent in constant currency, which includes a negative 60 basis points impact from the exit of certain content services business announced last year.

For 2020, revenue growth is estimated to be in the range of 2-4 per cent in constant currency, taking into estimate a negative 110 basis points impact from the exit.

“Our operating performance and strong free cash flows in the fourth quarter reflect the actions taken throughout 2019 to improve our cost structure and instill greater operating discipline across the company,” Cognizant CFO Karen McLoughlin said. The 2020 outlook reflects the company’s commitment to further improve cost structure to fund investments in growth.