Infosys Technologies (NASDAQ:INFY) Announces Results for the Quarter ended September 30, 2007
Q2 Revenues Grew Sequentially by 10.1%; Annual Guidance Revised Upwards Revenues Expected to Grow 34.5% - 35.0% in Fiscal 2008
Infosys Technologies (NASDAQ:INFY):
Highlights
Consolidated results for the quarter ended September 30, 2007
-- Second quarter revenues at $ 1,022 million, up 37.0% from the
corresponding quarter last fiscal
-- Earnings per American Depositary Share (ADS) increased to
$ 0.48 from $ 0.36 in the corresponding quarter last fiscal
-- 48 new clients were added during the quarter
-- Gross addition of 8,543 employees (net 4,530) for the quarter
-- 80,501 employees as on September 30, 2007
Outlook for the quarter ending December 31, 2007, and the fiscal
year ending March 31, 2008
-- Consolidated revenues expected to be between $ 1,073 million
and $ 1,078 million for the quarter ending December 31, 2007
(YoY growth of 30.7% - 31.3%) and between $ 4.16 billion and
$ 4.17 billion for the fiscal year ending March 31, 2008 (YoY
growth of 34.5% - 35.0%)
-- Consolidated earnings per ADS(a) expected to be $ 0.51 for the
quarter ending December 31, 2007; (YoY growth of 30.8%) and
between $ 1.98 and $ 1.99 for the fiscal year ending March 31,
2008; (YoY growth in the range of 29.4% - 30.1%)
(a) Including tax reversal of US$ 13 mn and US$ 29 mn in fiscal
2008 and 2007 respectively. Excluding the tax reversals the
consolidated Earnings per American Depositary Shares are expected to
be between $ 1.96 to $ 1.97; YoY growth of 32.4% to 33.1%
Infosys Technologies Limited ("Infosys" or "the company") today
announced financial results for the second quarter ended September 30,
2007. Revenues for the quarter aggregated $ 1,022 million, up 37.0%
from $ 746 million for the quarter ended September 30, 2006.
"We have achieved yet another milestone by crossing one billion
dollars in revenues this quarter," said S. Gopalakrishnan, CEO and
Managing Director. "In an increasingly flat world, our unique business
model combined with our value proposition continues to help our
clients grow profitably."
During the quarter, 48 clients were added. Infosys drove growth in
Europe with new wins and strengthened existing client relationships
with a focus on increasing its share of the sourcing pie.
Infosys' multimillion-dollar contract with Royal Philips
Electronics of the Netherlands was among the largest Finance &
Accounting business process outsourcing (BPO) engagements from India
and has expanded Infosys' global network into Poland and Thailand
while strengthening its European operations.
Growth in North America continued to be strong. To improve
proximity to clients in the region, Infosys opened its first Latin
American subsidiary in Monterrey, Mexico. The subsidiary, Infosys
Technologies S. De RL De CV, provides business consulting and
information technology services as well as key offerings in business
process outsourcing, infrastructure management and packaged solutions
implementation.
Infosys became the first company outside North America to join the
Financial Institution Shared Assessments Program, the financial
services industry's leading standards body that provides tools for
evaluating the security practices of information technology (IT)
services providers. Infosys' participation in the program is a
reaffirmation of its commitment to providing a secure outsourcing
environment for clients.
In the energy sector, one of the largest drilling contractors in
the Middle East has signed up Infosys to conduct a scoping exercise
for SAP-based Business Intelligence implementation.
A leading global bank is using an Infosys-built application to
mine and assimilate distributed customer data, enabling it to tailor
services for its customers. A Fortune 500 manufacturer of
pressure-sensitive adhesive labels has signed up Infosys to build a
global order management and sourcing application to align its IT and
business objectives and create global best practices around vital
business processes.
In a multi-year engagement with a leading software vendor with
worldwide operations, Infosys is maintaining and enhancing core
corporate applications for finance, HR, legal and corporate services.
A global pharmaceutical and medical products company has selected
Infosys' product engineering services to enable it to rapidly innovate
and bring high quality products to the market.
In the UK, a leading retailer turned to Infosys to set up a
governance process and streamline project management to improve
delivery effectiveness.
Infosys is executing multiple research and product development
projects for a top telecom provider in Europe to help the client
introduce products to the market faster.
"Our operating margins improved during the quarter despite the
appreciating rupee," said V. Balakrishnan, Chief Financial Officer.
"We are proactively hedging our currency exposures to mitigate this
impact. Our hedging position as of September 30, 2007, was $ 1.4
billion."
About the Company
Infosys (NASDAQ:INFY) defines, designs and delivers IT-enabled
business solutions that help Global 2000 companies win in a flat
world. These solutions focus on providing strategic differentiation
and operational superiority to clients. With Infosys, clients are
assured of a transparent business partner, world-class processes,
speed of execution and the power to stretch their IT budget by
leveraging the Global Delivery Model that Infosys pioneered. Infosys
has over 80,000 employees in over 40 offices worldwide. Infosys is
part of the NASDAQ-100 Index. For more information, visit
www.infosys.com.
Safe Harbor
Certain statements in this release concerning our future growth
prospects are forward-looking statements, within the meaning of
Section 27A of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act of 1934, as amended,
which involve a number of risks and uncertainties that could cause
actual results to differ materially from those in such forward-looking
statements. The risks and uncertainties relating to these statements
include, but are not limited to, risks and uncertainties regarding the
success of our investments, risks and uncertainties regarding
fluctuations in earnings, our ability to sustain our previous levels
of profitability including on account of the appreciation of the rupee
against the US dollar, our ability to manage growth, intense
competition in information technology, business process outsourcing
and consulting services including those factors which may affect our
cost advantage, wage increases in India, our ability to attract and
retain highly skilled professionals, time and cost overruns on
fixed-price, fixed-time frame contracts, client concentration,
restrictions on immigration, industry segment concentration, our
ability to manage our international operations, reduced demand for
technology in our key focus areas, disruptions in telecommunication
networks or system failures, our ability to successfully complete and
integrate potential acquisitions, liability for damages on our service
contracts, the success of the companies in which we have made
strategic investments, withdrawal of governmental fiscal incentives,
political instability and regional conflicts, legal restrictions on
raising capital or acquiring companies outside India, and unauthorized
use of our intellectual property and general economic conditions
affecting our industry. Additional risks that could affect our future
operating results are more fully described in our United States
Securities and Exchange Commission filings including our Annual Report
on Form 20-F for the fiscal year ended March 31, 2007, and Quarterly
Report on Form 6-K for the quarter ended June 30, 2007, and our other
recent filings. These filings are available at www.sec.gov. We may,
from time to time, make additional written and oral forward-looking
statements, including statements contained in our filings with the
Securities and Exchange Commission and our reports to shareholders. We
do not undertake to update any forward-looking statements that may be
made from time to time by or on our behalf.
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Infosys Technologies Limited and subsidiaries
Consolidated Balance Sheets
(Dollars in millions except per share data)
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As of
-----------------------
March 31, September
2007 30, 2007
-----------------------
(1) (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 1,403 $ 1,837
Investments in liquid mutual fund units 6 4
Trade accounts receivable, net of allowances 565 646
Unbilled revenue 74 107
Prepaid expenses and other current assets 48 81
Deferred tax assets 2 2
-----------------------
Total current assets 2,098 2,677
-----------------------
Property, plant and equipment, net 738 914
Goodwill 128 139
Intangible assets, net 20 18
Deferred tax assets 19 29
Advance income taxes 33 77
Other assets 37 43
-----------------------
Total Assets $ 3,073 $ 3,897
-----------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 6 $ 9
Income taxes payable 4 64
Client deposits 1 1
Unearned revenue 72 91
Other accrued liabilities 272 342
-----------------------
Total current liabilities 355 507
Non-current liabilities
Other non-current liabilities 1 -
Minority interests
Stockholders' Equity
Common stock, $ 0.16 par value
600,000,000 equity shares authorized,
Issued and outstanding - 551,109,960 and 64 64
555,785,001 as of March 31, 2006, and
September 30, 2006, respectively
Additional paid-in capital 692 694
Accumulated other comprehensive income 90 334
Retained earnings 1,871 2,298
-----------------------
Total stockholders' equity 2,717 3,390
-----------------------
Total Liabilities And Stockholders' Equity $ 3,073 $ 3,897
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(1) March 31, 2007 balances were obtained from audited financial
statements
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Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Statements of Income
(Dollars in millions except per share data)
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Three months ended Six months ended
September 30, September 30,
-----------------------------------------------
2006 2007 2006 2007
(audited)
-----------------------------------------------
Revenues $746 $1,022 $1,406 $1,950
Cost of revenues 423 591 812 1,160
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Gross profit 323 431 594 790
-----------------------------------------------
Operating Expenses:
Selling and marketing
expenses 48 71 93 122
General and
administrative
expenses 63 77 119 154
Amortization of
intangible assets 1 2 1 4
-----------------------------------------------
Total operating
expenses 112 150 213 280
-----------------------------------------------
Operating income 211 281 381 510
Gain on sale of long-
term investment - - 1 -
Other income, net 14 38 42 100
-----------------------------------------------
Income before income 225 319 424 610
taxes and minority
interest
Provision for income
taxes 26 48 49 76
-----------------------------------------------
Income before minority
interest $199 $271 $375 $534
Minority interest - - 2 -
-----------------------------------------------
Net income $199 $271 $373 $534
-----------------------------------------------
Earnings per equity
share
Basic $0.36 $0.48 $0.68 $0.94
Diluted $0.35 $0.48 $0.66 $0.94
Weighted average
equity shares used in
computing earnings
per equity share
Basic 551,938,696 568,376,262 550,964,911 568,376,262
Diluted 564,858,570 570,449,774 563,832,673 570,478,084
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