Infosys Q3 net profit up 14%
Software bellwether Infosys Technologies reported a 14.2% rise in third-quarter net profit on Thursday, aided by a rebound in the US economy, and also raised its full-year revenue forecast. Its shares fell nevertheless in a syndrome of increased expectations from the Bangalore-based giant.business Updated: Jan 14, 2011 01:09 IST
The company — by its own policy — typically promises less and delivers more, but market analysts tend to factor this and drive up their earnings estimates that Infosys sometimes misses – as it did this time.
In the past 12 quarters, Infosys has failed to meet its own guidance only twice.
Infosys added 40 clients and hired 5,311 more employees in the October-December quarter, but expressed concerns over currency fluctuations and uncertain economic environment in the US and Europe, prime markets for which it carries out outsourced information technology services.
The company’s net profit for October-December 2010 stood at Rs 1,780 crore, 14.2% over the year-ago quarter, while quarterly revenues at Rs 7,106 crore were up 24% on the year.
The figures were better in dollar terms, underlying Infosys vulnerability to currency changes — which have nothing to do with its own core performance. In dollar terms, net profit for the quarter at $397 million was up 19%, while revenues at $1.6 billion rose as much as 29%.
Though the company beat its own guidance, its performance fell short of market expectations. Its shares fell 5% to close at Rs 3212.3 at the Bombay Stock Exchange. The mood was compounded by lingering concerns over the global economy.
“The weaker economic recovery in developed markets coupled with high unemployment and risk of sovereign default could impact industry growth,” CEO S “Kris” Gopalakrishnan said, adding a double-dip recession in the US was unlikely.
“We are seeing an increase in demand for new services... ” said SD Shibulal, chief operating officer, Infosys said in a