Cognizant beats the Street in Q4, announces new CEO
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Cognizant beats the Street in Q4, announces new CEO

Cognizant, an expert at helping traditional companies from a variety of sectors undergo “digital transformation” reported fourth-quarter earnings at the end of last week that demonstrated a healthy business. The company beat the Street on top and bottom lines, and investors rewarded its success on the market, sending the company’s share price up even further this year.

Cognizant’s share price has improved by 16% so far this year

graph 11 cognizant

Source: Yahoo Finance

The company reported earnings of $1.13 per share, a fairly easy beat against predictions of $1.05 per share, and a 9.7% increase year on year. Cognizant also reported revenues of $4.129 billion. Again, that’s a fairly easy beat against consensus estimates of $4.114 billion for fourth-quarter revenue, and a year on year improvement of 8.8%. Revenue came in at the higher end of guidance ($4.09 - $4.13 billion). Geographically, Europe drove performance, and revenues on the continent rose by more than 20%.

On its earnings call, the company took the opportunity to announce the appointment of a new CEO. Francisco D’Souza, the incumbent, told listeners:

Having co-founded Cognizant, which celebrated its 25th anniversary less than two weeks ago, I've spent half my life here and I've had the privilege of serving as CEO for the past 12 years. Last year, in connection with the board's regular leadership assessment and succession planning processes, I informed my fellow board members that I was considering stepping down from my role as CEO sometime in 2019. As a board, we embarked upon a methodical search for my successor to ensure a fully thought through and orderly transition when the time came. Our announcement this morning is the result of that process."

I'm pleased that Brian Humphries, who's the CEO of Vodafone business and a member of Vodafone Group's Executive Committee, will be the new CEO of Cognizant effective April 1 of this year. Brian is a terrific executive and I look forward to working with him closely to ensure the smoothest possible transition. I speak for all of my fellow directors in saying that Brian is a strong choice to lead Cognizant in its next phase of growth.”

Disclosure

Dominion holds Cognizant in its Global Trends Managed Fund.


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