NEW YORK (AP) ? Shares of Cognizant Technology Solutions Corp. jumped 12 percent on Monday as the company's second-quarter results beat Wall Street's view and it lifted its full-year earnings outlook.
THE SPARK: Earlier in the day Cognizant reported adjusted earnings of 88 cents per share on revenue of $1.8 billion. Analysts predicted earnings of 81 cents per share on revenue of $1.79 billion, according to a poll by FactSet.
Cognizant, based in Teaneck, N.J., provides information technology, consulting and business processing outsourcing services to financial institutions.
The company now expects full-year adjusted earnings of $3.64 per share. Its prior outlook was for $3.62 per share. It maintained its forecast for revenue of at least $7.34 billion.
Wall Street foresees earnings of $3.38 per share on revenue of $7.34 billion.
THE ANALYSIS: Joseph Foresi of Janney Capital Markets says Cognizant showed some resilience during the quarter with its better-than-expected performance, as there was concern that the company might cut its outlook.
"We acknowledge that we are not out of the woods yet; however, Cognizant is a name that performs well coming out of a downturn. It has an excellent record of execution," the analyst wrote in a note to clients.
Foresi reiterated a "Buy" rating and $68 price target.
Jefferies & Co.'s Jason Kupferberg says revenue from the financial services business, which is Cognizant's biggest segment, rose 6.1 percent and was better than the 2.1 percent increase posted in the first quarter.
The analyst anticipated that the results would give a lift to the company's stock, as there had been low expectations heading into the quarter because Cognizant had lowered its full-year outlook in May.
Kupferberg maintained a "Buy" rating and $76 price target.
SHARE ACTION: Cognizant's stock rose $6.94, or 12 percent, to $64.80 in morning trading. The shares have traded in a 52-week range of $53.54 to $78. It is the second-biggest gainer on the Standard & Poor's 500 on Monday.
Source: http://news.yahoo.com/cognizant-tech-rises-2q-results-top-street-153720744--finance.html
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