Cognizant beats expectations thanks to high-spending healthcare clients
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Cognizant beats expectations thanks to high-spending healthcare clients

Cognizant Technology Solutions Corp beat expectations in the fourth quarter, delivering more revenue and higher earnings than analysts had predicted. The driving force behind this outperformance? Increased spending from healthcare and financial clients on Cognizant’s platform. Looks like all that inward investment in digital services is continuing to pay off.

Cognizant’s share price has risen by 34% over the last 12 months

graph 1202 cognizant

SOURCE: Yahoo Finance

Revenue rose 10.6% from the same period last year, to $3.83 billion. This edged out analysts’ expectations of $3.28 billion. The healthcare sector was a big driver of growth, outperforming the rest of the business. Revenue in that division rose by 12% in the fourth quarter.

Cognizant’s financial services division, which saw its revenue increase by 5.4% in the last quarter, forms a bigger chunk of its business than healthcare – but healthcare has been the fastest growing for some time. Cognizant’s CEO, Francisco D’Souza, discussed this outperformance in a recent interview, telling journalists that:

“Healthcare is an area of deep strength at Cognizant… I continue to feel that we have a very strong position in that market.”

Cognizant also beat the Street on earnings, delivering $1.03 per share rather than analysts’ expectations of $0.97.

In a separate statement last Wednesday, Cognizant has pledged to support “science, technology, engineering and mathematics,” in the U.S. through the formation of a new non-profit. The company said it will make an “initial grant” of $100 million to the foundation.

Disclosure

Dominion holds Cognizant in its Global Trends Managed Fund.


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