Cognizant Latest Offshore Outsourcer To Post Double-Digit Growth

Cognizant Technology Solutions Corp. has joined the list of offshore IT service providers reporting blistering quarterly growth. The company, which is headquartered in New Jersey but provides application-development services primarily from India, said Wednesday that first-quarter revenue rose 52% year over year to $181.7 million. Net income for the three months ended March 31 jumped 62% to $32 million. Per-share earnings climbed 57% to 22 cents. The company added 1,700 workers in the quarter.

Last week, India's Infosys Technologies, Satyam Computer Services, Tata Consultancy Services, and Wipro Technologies reported fourth-quarter revenue growth ranging from 37% to 39% and increases in net income ranging from 37% to 55%. Analysts say sales of offshore services are booming because more Western companies are looking to place IT work in low-cost countries such as India and China. The practice is gaining steam even as some politicians and labor groups say it's eroding the high-tech job base in the United States.

In its first quarter, Cognizant added new customers in the financial services, health-care, and retail industries, the company says. Cognizant also is bolstering its service offerings through acquisitions. Earlier this month, it purchased Chicago-based business-technology consulting firm Fathom Solutions for $19 million.

Looking ahead, Cognizant says it expects to post revenue of at least $206 million, including $6 million in sales from Fathom, in the second quarter. The company anticipates earnings per share of 23 cents in the period. For fiscal 2005, Cognizant expects total revenue of at least $870 million, including $20 million in sales from Fathom. It expects per-share earnings for 2005 to come in at about 99 cents.