May 5, 2009 / 11:17 AM / in 9 years

UPDATE 2-Cognizant Q1 EPS beats Street; backs '09 rev view

* Q1 EPS $0.38 vs est $0.37 * Q1 revenue up 16 pct

* Sees 2009 revenue of at least $3.1 bln

* Shares rise 6 pct (Recasts; adds analyst comments, details, share movement)

By Bijoy Anandoth Koyitty

BANGALORE, May 5 (Reuters) - IT service provider Cognizant Technology Solutions Corp (CTSH.O) posted a quarterly profit that beat market estimates by a cent, helped by higher revenue, and forecast strong second-quarter results.

The company also reiterated its 2009 revenue outlook of at least $3.1 billion.

The results and the sequentially higher second-quarter outlook potentially signal a bottom in terms of weakness in revenue for Cognizant, and may be for the offshore sector in general, Jefferies & Co analyst Joseph Vafi said by phone.

Dismal demand trends have forced outsourcing giant Infosys Technologies Ltd (INFY.BO) INFY.O to forecast an annual sales drop for the first time in its history, while rival Wipro Ltd (WIPR.BO) has forecast a fall in June-quarter revenue.

Vafi said Cognizant’s customer mix was working in its favor.

“Cognizant has some customers right now who may be a little bit stronger in their IT spending. Their largest customer, JPMorgan Chase (JPM.N), has been pretty aggressive with their offshore initiatives,” Vafi said.

JPMorgan accounts for about 4 percent to 6 percent of Cognizant’s revenue. Other key customers include Pfizer Inc (PFE.N), eBay Inc (EBAY.O) and Credit Suisse CSGN.VX.

For the second quarter, the company forecast earnings of 37 cents a share, on revenue of at least $760 million. On an adjusted basis, it expects to earn 42 cents a share.

Analysts on average were expecting earnings of 37 cents a share, before items, on revenue of $750.8 million, according to Reuters Estimates.

For the first quarter, Cognizant reported earnings of $113.1 million, or 38 cents a share, compared with $101.9 million, or 34 cents a share, a year ago.

Revenue rose 16 percent to $745.9 million.

Analysts expected earnings of 37 cents a share, on revenue of $735.7 million.

Shares of the company were trading up $1.15 at $27.05 Tuesday morning on Nasdaq. (Editing by Anne Pallivathuckal)

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