Cognizant Falls as Slower IT Deals Prompt Lower ForecastAlex Barinka
Cognizant Technology Solutions Corp. tumbled the most in more than two years after lowering its annual revenue forecast, as tech-service deals took longer to close amid weakness in certain U.S. and U.K.-based customers.
Cognizant shares fell 13 percent to $43.67 at the close in New York, the biggest drop since May 2012. The stock had declined 1 percent this year through yesterday.
Sales this year will increase by at least 14 percent, from a prior projection of more than 16 percent, the Teaneck, New Jersey-based company said in a statement today. Second-quarter earnings, excluding some items, were 66 cents a share, topping analysts’ average estimates of 63 cents, according to data compiled by Bloomberg.
Cognizant, one of the largest providers of outsourcing services, said the biggest effect on this year’s revenue was management changes at some of its biggest clients, delaying orders in some contracts.
“Clients aren’t spending as much as we expected on projects as we were anticipating,” President Gordon Coburn said on the second-quarter earnings conference call.