Cognizant Technology Solutions Forecasts Below-Estimate Revenue Amidst Economic Uncertainty
Cognizant Technology Solutions has projected annual revenue below analysts' predictions due to ongoing uncertainty surrounding interest rate adjustments, leading to cautious spending by companies on IT services and consulting.
Elevated capital costs continue to impact IT spending, resulting in reduced consultancy services while prioritizing investments in AI-related projects. Cognizant's stock dropped 1.2% in after-hours trading.
Uncertainties surrounding the Federal Reserve's potential rate cuts in 2023 are amplified by policy shifts under President Trump, prompting businesses to limit expenditures. The company reported quarterly revenue of $5.08 billion, marginally surpassing analyst expectations of $5.07 billion.
Cognizant's adjusted earnings reached $1.21 per share in the quarter ending December 31, exceeding estimates of $1.12 per share. The New Jersey-based firm projects first-quarter revenue between $5 billion and $5.1 billion, compared to analyst consensus of $5.06 billion.
For 2025, Cognizant forecasts revenue within the range of $20.3 billion to $20.8 billion, lower than the estimated $20.89 billion. Adjusted earnings are projected to be between $4.90 and $5.06 per share, with the midpoint at $4.98 per share, slightly below the estimated $4.99 per share.