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Cognizant Reported Its 1Q18 Results on May 7

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Nov. 20 2020, Updated 3:20 p.m. ET

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?

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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.

The share prices of peer information technology consulting companies Accenture (ACN), IBM (IBM), and Teradata (TDC) have generated returns of -0.75%, -0.48%, and 1%, respectively, as of May 7.

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