Cognizant Q3 net profit dips 3.6% to $477 million on weakening rupee

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US-based IT major Cognizant Tuesday said its net profit dipped 3.6 per cent to $477 million in the September quarter on account of higher foreign exchange losses.

The company had registered a net profit of $495 million in July-September 2017, Cognizant said in a statement.

“The decrease in net income was primarily due to higher net non-operating foreign exchange losses in 2018 driven by the depreciation of the Indian rupee versus the prior year period,” it added.

The company’s revenues rose 8.3 per cent to $4.08 billion in the third quarter, meeting its guidance range of $4.06-4.10 billion for the period. In the September 2017 quarter, its revenue was $3.77 billion.

Cognizant expects its revenue for the full year to be in the range of $16.09 billion to $16.13 billion. For the fourth quarter, it expects revenues to be in the range of $4.09-4.13 billion.

The company, which follows January-December as fiscal, has a majority of its workforce in India.

“Cognizant delivered strong third-quarter results in three of our four business segments. We made continued progress in our shift to digital by building new capabilities and helping our clients excel with digital services and solutions,” Cognizant CEO and Vice Chairman of the Board Francisco D’Souza said.

He added that the company’s performance this year demonstrates its “ability to both invest for growth and achieve our financial targets”.

“We delivered solid performance in the third quarter as we continued to focus on sustainable revenue growth while increasing margins…The strength of our balance sheet allows the company to maintain financial flexibility while driving a substantial return of capital to shareholders,” Cognizant CFO Karen McLoughlin said.

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