Cognizant Posts Lower 2Q Profit As Sales Fall From Covid-19, Ransomware Attack
July 29 2020 - 5:09PM
Dow Jones News
By Kimberly Chin
Cognizant Technology Solutions Corp. reported lower profit in
the fiscal second quarter as the effects of the Covid-19 pandemic
as well as a ransomware attack early in the quarter dented
sales.
Cognizant said it has seen an improvement in revenue and booking
through May and June. Client demand has picked up in cloud and
enterprise-application services, IT modernization and digital
engineering, the company said.
The professional-services company said net profit was $361
million, or 67 cents a share, down from $509 million, or 90 cents a
share, a year earlier. Adjusted earnings were 82 cents a share.
Analysts surveyed by FactSet expected a profit of 69 cents an
adjusted share.
The company lowered costs and selling, general and
administrative expenses, but recorded higher restructuring and
depreciation and amortization expenses.
Sales fell to $4 billion from $4.14 billion a year earlier.
Analysts were expecting $3.83 billion in revenue. While it saw
sales declines across most of its segments in the quarter, the
bright spot was its healthcare segment which rose 2% driven by
life-science clients from its Zenith Technologies acquisition.
The company said the decline in its products and resources
segment was coming from customers in industries hit hard by the
pandemic like retail, consumer goods, travel and hospitality.
Meanwhile, its decision to exit certain content-related business
negatively affected its communication, media and technology
segment, Cognizant said.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
July 29, 2020 16:54 ET (20:54 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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