Infosys (INFY) Q4 Earnings Match Estimates, Revenues Surpass
Zacks Investment Research | Apr 14, 2019 10:32PM ET
Infosys Limited’s (NYSE:INFY) fourth-quarter fiscal 2019 adjusted earnings of 13 cents per share were in line with the Zacks Consensus Estimate.
Revenues of $3.06 billion increased 9.1% year over year and also surpassed the Zacks Consensus Estimate of $3.04 billion. In terms of constant currency (CC), revenues were up 11.7%.
Rise in large deal wins and fast growing digital services remain key catalysts. However, contraction in margins remains a key concern.
Quarterly Details
Digital Revenues (34% of total) surged 37.5% year over year to $1.04 billion while Core Revenues (66%) dipped 1% to $2.03 billion.
Strong demand for cloud, IoT, cyber plus data and analytics is a key driver. Robust digital demand across regions and particularly, in client segments like telco, energy, utilities, retail, insurance and manufacturing is a steady tailwind. Higher investments by clients in digital transformation, artificial intelligence and automation are an upside.
Geographically, on a sequential basis, North America and Europe revenues rose 3.7% and 1.4%, respectively, at CC. While, Rest of the World and India declined 1.3% and 9.1%, each.
Segment wise, Communication achieved maximum sequential growth of 16.6%. Hi Tech, Energy, Utilities, Resources & Services and Manufacturing rose 6.9%, 1.5% and 1.6%, respectively.
Escalating client spends on automation, analytics, VPN, cloud area and ERP (Enterprise resource planning) implementation are boosting the Hi Tech vertical. The Utility segment is driven by “investments in the pipeline modernization initiative and digitalization of legacy stacks”.
Meanwhile, Financial Services, Retail and Life Sciences slid 0.8%, 0.9% and 1.9%, respectively. Budget constraints of some U.S. clients were an overhang on Financial Services. Slowing growth and steep cost pressures are adversely impacting Life Science clients.
In the last reported quarter, the company inked 13 large deals with a total contract value (TCV) of more than $1.6 billion. Three of these were in Financial Services, Manufacturing and Life Sciences, two in Hi Tech and one in Retail and other segment.
Geographically, seven were from America, five from Europe and one from India.
The company reported that its $100 million-plus clients are now 25 compared with 20 a year ago.
Augmenting traction of the company’s digital banking platform with new major global logos adopting it in fiscal 2019 is a key driver.
Infosys Limited Price, Consensus and EPS Surprise
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