Cognizant Technology Solutions Corp. climbed the most in six months after increasing its 2015 sales and earnings forecasts.
Cognizant raised its outlook for sales growth to at least 19.3 percent, up from 19 percent, after seeing better-than-expected customer demand for technology services in the first quarter. The company now expects earnings per share, excluding some items, of $2.93, up from its prior outlook of at least $2.91.
One of the largest providers of outsourcing services, Cognizant has catered to corporate need for less-expensive technology consulting and implementation, as well as demand for Web-based cloud computing. The Teaneck, New Jersey-based company, which relies on a global workforce of more than 217,000 employees, counts JPMorgan Chase & Co. and Pfizer Inc. among its clients.
“There is a shift going on, where across industries, businesses are trying to squeeze the spend on ‘run the business’ so that they can invest in ‘change the business,’” Gordon Coburn, president of Cognizant, said in a phone interview. “We’ve been able to navigate that shift.”
Cognizant gained 6.2 percent to $62.78 at the close in New York, the most since November. The shares have gained 19 percent this year.
With the rise of cloud-computing, where technology can be delivered quickly over the Internet, instead of installed on site, customers have demanded more flexibility and lower costs.
Throughout this shift, Cognizant has seen sales increase, with first-quarter revenue from consulting and technology services growing 32 percent compared with a year earlier, Chief Financial Officer Karen McLoughlin said on a conference call Monday. Outsourcing services rose 8 percent, she said. Older competitors like International Business Machines Corp. and Hewlett-Packard Co. have seen services sales decline.
“We don’t bring a lot of legacy baggage with us,” Coburn said. “We’re not cannibalizing our install base.”