Cognizant first-quarter revenue beats estimates on steady spending by clients

(Reuters) - Cognizant Technology Solutions beat Wall Street estimates for first-quarter revenue on Wednesday, helped by steady spending by clients, sending its shares up more than 4% in aftermarket trading. 

Signs of improving business environment and expectations of interest rate cuts have encouraged clients to ramp up spending on technology and consulting services, helping firms such as Cognizant.

Cognizant said total headcount at the end of the first-quarter was 344,400, a decrease of 3,300 from the fourth-quarter last year.

The New Jersey-based IT services provider’s revenue for the first quarter stood at $4.76 billion, compared with analysts’ average estimate of $4.72 billion, according to LSEG data.

The company’s adjusted profit per share in the reported quarter was $1.12, compared with the estimate of $1.11 per share. 

It expects second-quarter revenue between $4.75 billion and $4.82 billion, the mid-point of which is below estimate of $4.82 billion.

Cognizant has cut its annual revenue forecast in the range of $18.9 billion to $19.7 billion, compared with its prior expectations of $19.0 billion to $19.8 billion.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi)