Infosys Net Misses Estimates as Clients Curb Technology Spending
Infosys Ltd. (INFO), India’s second-largest software exporter, reported first-quarter profit that missed analysts’ estimates as customers cut information-technology spending amid economic uncertainty.
Net income rose to 22.9 billion rupees in the three months ended in June, from 17.2 billion rupees a year earlier, Bangalore-based Infosys said today. That compares with the 24.2 billion rupee median of 31 analyst estimates compiled by Bloomberg.
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 allocation. Researcher Gartner Inc. said this month that global IT spending would grow at a slower pace this year because of the Eurozone crisis, a slowdown in China and a weaker U.S. recovery.
“We’re going to see weaker revenue from Infosys for the quarter and full year, because of its greater exposure to consulting work,” said Hitesh Shah, an analyst at IDFC Securities Ltd. in Mumbai. “Spending on consulting is drying up because of the macro uncertainty.”
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