Nasdaq-listed Cognizant Technology Solutions fell short of its revenue expectations in its second-quarter earnings filed on Wednesday. It reported a 12.7 percent rise in net profit to $577 million from $512 million year-on-year on the back of a 9.5 percent rise in revenue in constant currency.
Soon after the announcement, Cognizant shares fell over 20 percent on the Nasdaq from the beginning of the year. At the end of market hours, the share was trading at $70.30 while it was at $89.57 on January 3.
Cognizant announced earnings per share of $1.14 on revenue of $4.91 billion.
Healthcare revenue was driven by digital services among pharmaceutical clients, whereas products and resources revenue was driven by strength among automotive, retail and consumer goods clients.
The revenue of communications, media and technology was driven by strength among digital native companies.
"In a period of unprecedented labour market conditions characterised by elevated attrition and significant wage inflation, we focused on our client commitments and delivered balanced financial results in the second quarter," Cognizant chief executive officer Brian Humphries said.
The company has a total headcount of 341,300, of which 240,000 are in India.
It added over 900 employees quarter-on-quarter and over 40,100 year-on-year.
"As we position the company for sustained success, we will continue to invest in our talented employees, our clients and our capabilities," Humphries said.
The IT firm bought back 4.2 million shares for $300 million during the second quarter and 9.2 million shares for $744 million year-to-date under its share repurchase programme. As of June 30, 2022, there was $1.4 billion remaining under the share repurchase authorisation.
On July 26, 2022, the company declared a quarterly cash dividend of $0.27 per share for shareholders of record on August 19, 2022. This dividend is payable on August 30, 2022.
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