IT outsourcing Stocks Slump with Infosys (INFY, WIT, CTSH, SYNT, ACN, HPQ)
Shares of IT outsourcing companies were under pressure as Infosys Ltd ADR (NASDAQ:INFY), India’s second largest software-services exporter, provided lower- than- estimated sales outlook. The company said that it projects to generate revenue between 384.3 billion rupees ($7.5 billion) and 391.4 billion rupees in the current. Full-year earnings are expected to grow 4-5.70% from last year to a range of $3.12 – $3.17 per ADS. . Analysts expect full-year earnings of $3.25 per share and revenues of $7.96 billion.
The company reported that profit during the fourth quarter jumped to $463 million from $402 million. Earnings per American Depository Share or ADS grew to $0.81 from $0.70, matching analysts’ estimates. Revenues for the quarter grew to $1.771 billion from $1.602 billion, but slipped 1.9% sequentially. Analysts were projecting revenues of $1.81 billion.
The company’s Chief Financial Officer V. Balakrishnan said Infosys experienced “a very difficult quarter” and was able to deliver on earnings per share guidance due to its strong financial discipline and high quality growth. “The global currency market volatility continues to be a challenge for the industry,” he added. The Board of Directors recommended a final dividend of 22 rupee per ADS for fiscal 2012 and a special dividend of 10 rupee per ADS on account of completion of 10 years of Infosys BPO operations. This translates to final dividend of about $0.43 per ADS and special dividend of $0.20 per ADS. Shares of INFY slumped 14% to $48.83 on heavy trading.
Shares of other companies within the sector slid as well including Wipro Limited (ADR)(NYSE:WIT) slid 6.31% to $10.09, Cognizant Technology Solutions Corp (NASDAQ:CTSH) fell 3.20% to $74.31, Syntel, Inc. (NASDAQ:SYNT) lost 2.70% and Accenture Plc (NYSE:ACN) fell 2.15%.
Shares of Hewlett-Packard Company (NYSE:HPQ) also slumped about 3%.