Cognizant Q1 net narrowly beats estimates, up 26% to $557 mn

IT services provider Cognizant Technology Solutions Corp reported a quarterly profit that edged past analysts' estimates on continued demand from its healthcare and financial clients.

Revenue from its financial services sector, which accounts for more than a third of its total revenue, rose 7 percent in the first quarter ended March 31, while revenue from healthcare services rose 9.7 percent.

Cognizant said it expected current-quarter revenue in the range of USD 3.63 billion to USD 3.68 billion. Analysts on average had expected revenue of USD 3.65 billion, according to Thomson Reuters I/B/E/S.

The company's net income rose to USD 557 million, or 92 cents per share, in the first quarter from USD 441 million, or 72 cents per share, a year earlier.

Revenue rose 10.7 percent to USD 3.55 billion.

Excluding items, the company earned 84 cents per share, while analysts' were expecting 83 cents.

In February, the company agreed to appoint three new directors and return USD 3.4 billion to shareholders, bowing to pressure from activist investor Elliott Management.

A major concern for companies such as Cognizant has been US President Donald Trump's tough stance on the H1-B visa rules. The company has a majority of its employees in India.

H1-B visas are non-immigrant visas that allow US companies to temporarily employ foreign workers.