Infosys Cuts Sales Forecast as Net Misses Estimates; Shares Drop
Infosys Ltd. (INFO), India’s second-largest software exporter, cut its forecast for sales in dollar terms as it reported profit that missed estimates after customers reduced spending amid global economic concerns.
Sales in the year ending March 31 may rise to $7.34 billion, Bangalore-based Infosys said in a statement today, lower than the $7.55 billion forecast in April.
Infosys Co-Chairman S. Gopalakrishnan said in February that customers “concerned” by the operating environment are reducing IT budgets and are less likely to spend their entire allocations. Researcher Gartner Inc. said this month that global IT spending would grow at a slower pace this year due to the Eurozone crisis, a slowdown in China and a weaker U.S. recovery.
“If you’re not seeing great visibility in the first two quarters, it is not likely the second half of the year will give you a big push,” said Vihang Naik, an analyst at MF Global Sify Securities Pvt. in Mumbai. “Raising the guidance is just highly unlikely in this macroeconomic scenario.”
Infosys shares plunged 10 percent to 2,234.2 rupees at 9:15 a.m. in Mumbai.
In April, Infosys forecast rupee sales for the year ending March 31 to be in the range of 384.31 billion rupees and 391.36 billion rupees.
The company had forecast dollar sales for the fiscal year to be in the range of $7.553 billion and $7.692 billion. Earnings per American depository share may be in the range of $3.12 to $3.17, Infosys said in April.
To contact the reporter on this story: Ketaki Gokhale in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Anand Krishnamoorthy at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.