Cognizant reported revenue of $3.9 billion in 1Q18
Cognizant Technology Solutions (CTSH) reported its 1Q18 results on May 7, and its stock fell more than 5.2% to close at $77.86 on the day. The stock has generated a 23% return in the last 12 months and a -1.5% return in the last month after rising more than 27.5% in 2017. Cognizant is trading 23% above its 52-week low of $63.39 and 8.5% below its 52-week high of $85.10.
Cognizant reported revenue of $3.9 billion in 1Q18, a rise of 10.3% YoY (year-over-year). Its non-GAAP (generally accepted accounting principles) EPS (earnings per share) rose 26% YoY to $1.06 in 1Q18, up from $0.84 in 1Q17.
Analysts had expected the company to post revenue of $3.9 billion and EPS of $1.06 in 1Q18. So why did shares of Cognizant fall despite its posting earnings in line with analysts’ estimates?
Weak revenue guidance drove Cognizant shares lower
During its 1Q18 earnings call, Cognizant forecast revenue in the range of $4 billion–$4.04 billion compared to analysts’ consensus estimate of $4.03 billion for 2Q18. The company also forecast non-GAAP EPS of $1.09, which was below analysts’ consensus estimate of $1.12, for 2Q18.