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Thursday 30 July 2020

Double-whammy makes a tough Q2 for Cognizant

logoIt was of course a difficult quarter for Teaneck, New Jersey-headquartered, India-centric services major, Cognizant, impacted by a now-contained ransomware attack (see Cognizant Q120 Update) adding to pressures from the COVID-19 pandemic.

Headline revenues for the three months to 30th June declined yoy by 3.4% (2.5% ccy) to $4b on the nail, nearly 7% lower than the prior quarter. Operating margins squeezed down to 11.7%, 140bps lower yoy but 360bps down qoq. UK revenues were essentially flat yoy in local currency, and some 3% down qoq – a result under the circs! Cognizant is now expecting FY 2020 revenues in the range $16.4-16.7b, an average 1.3% down on 2019 (ccy).

CEO Brian Humphries has not been distracted from redirecting the business towards a more ‘digital’ direction, having acquired US-based Workday consultancy Collaborative Solutions in May (see here) and Microsoft public cloud specialist, New Signature, a few days ago (see here).

Cognizant is flush with cash (over $4.4b) and carries under $2.5b in debt, so Humphries still has a lot of headroom to try to get the company back on track.

Posted by: Anthony Miller

Tags: offshore  

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