Infosys (Nasdaq:INFY):
Highlights
Consolidated results for the quarter ended September 30, 2006
-- Second quarter revenues at $ 746 million, up 42.4% from the
corresponding quarter last fiscal
-- Earnings per American Depositary Share (ADS) (a) increased to
$ 0.36 from $ 0.25 in the corresponding quarter last fiscal
-- 45 new clients were added during the quarter
-- Gross addition of 10,795 employees (net 7,741) for the quarter
-- 66,150 employees as on September 30, 2006
Outlook for the quarter ending December 31, 2006 and the fiscal
year ending March 31, 2007
-- Consolidated revenues expected to be between $ 790 million and
$ 795 million for the quarter ending December 31, 2006 (YoY
growth of 41.3% - 42.2%) and between $ 3.03 billion and $ 3.04
billion for the fiscal year ending March 31, 2007 (YoY growth
of 40.6% - 41.1%)
-- Consolidated earnings per ADS (a) expected to be $ 0.37 for
the quarter ending December 31, 2006; (YoY growth of 42.3%)
and $ 1.44 for the fiscal year ending March 31, 2007; (YoY
growth of 41.1%)
Infosys Technologies Limited ("Infosys" or "the company") today
announced financial results for its second quarter ended September 30,
2006. Revenues for the quarter aggregated $ 746 million, up 42.4% from
$ 524 million for the quarter ended September 30, 2005.
"Our business model provides a compelling value proposition to
clients in a flat world," said Nandan M. Nilekani, CEO and Managing
Director. "Our robust organic growth coupled with investments in
various strategic areas helped us to grow faster in this environment.
We have revised our guidance to cross $ 3 billion in revenues this
fiscal."
Infosys is enabling a leading US cable provider offering cable TV,
Internet, telephony and wireless services to launch and test
time-critical services with a focus on creating new revenue streams.
Enterprise services are enabling companies to become nimbler and
more competitive. In a long-term engagement with a large US airline
company, Infosys is implementing organization-wide Oracle Financials
to transform its finance function in addition to incorporating best
practices and operating procedures for enhanced effectiveness.
(a) Adjusted for stock split
Infosys' Independent Validation Services (IVS) are gaining
traction with clients across industry verticals. Infosys is
establishing a Testing Center of Excellence (TCoE) to streamline
Quality Assurance (QA) for a North American brokerage firm and
developing enterprise QA strategy for a leading global insurance
company. Infosys is also engaged in assessment and redesign of QA and
testing processes, and performance validation for another insurance
firm with global operations.
Infosys Consulting Inc. added nine new clients including an asset
maintenance & servicing company in Australia and a recognized market
leader in smartphones, handhelds, software and accessory solutions.
"The rupee depreciated marginally during the quarter with
consequent benefit to us," said V. Balakrishnan, Chief Financial
Officer. "Our operating margins also improved despite absorbing wage
increases and other strategic investments."
About the company
Infosys (Nasdaq:INFY) defines, designs and delivers IT-enabled
business solutions. These provide our clients with strategic
differentiation and operational superiority, thereby increasing their
competitiveness. Each solution we provide is delivered with the
industry-benchmark "Infosys Predictability" that gives our clients
peace of mind. With Infosys, they are assured of a transparent
business partner, business-IT alignment with flexibility, 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 66,000 employees in over 39 offices worldwide. 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 manage growth, intense
competition in IT, 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 Infosys has 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, 2006 and our quarterly report on Form 6-K
for the quarter ended June 30, 2006. These filings are available at
www.sec.gov. Infosys may, from time to time, make additional written
and oral forward-looking statements, including statements contained in
the company's filings with the Securities and Exchange Commission and
our reports to shareholders. The company does not undertake to update
any forward-looking statements that may be made from time to time by
or on behalf of the company.
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Infosys Technologies Limited and subsidiaries
Consolidated Balance Sheets
(Dollars in millions except per share data)
As of
March 31, 2006 September 30, 2006
---------------------------------
(1) (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $889 $328
Investments in liquid mutual fund
units 170 615
Trade accounts receivable, net of
allowances 361 454
Unbilled revenue 48 74
Prepaid expenses and other current
assets 40 49
Deferred tax assets 1 2
---------------------------------
Total current assets 1,509 1,522
Property, plant and equipment, net 491 540
Goodwill 8 91
Intangible assets, net -- 18
Deferred tax assets 13 13
Advance income taxes 18 5
Other assets 27 31
---------------------------------
Total Assets $2,066 $2,220
---------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $3 $4
Income taxes payable -- 2
Client deposits 2 2
Unearned revenue 44 67
Other accrued liabilities 160 183
---------------------------------
Total current liabilities 209 258
Non-current liabilities
Other non-current liabilities 5 5
Minority interests 15 2
Stockholders' Equity
Common stock, $ 0.16 par value
600,000,000 equity shares authorized,
Issued and outstanding - 551,109,960
and 555,785,001 as of March 31, 2006
and September 30, 2006, respectively 31 62
Additional paid-in capital 410 477
Accumulated other comprehensive
income 9 (49)
Retained earnings 1,387 1,465
---------------------------------
Total stockholders' equity 1,837 1,955
---------------------------------
Total Liabilities And Stockholders'
Equity $2,066 $2,220
---------------------------------
(1) March 31, 2006 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)
Three months ended Six months ended
September 30, September 30
------------------------- -------------------------
2005 2006 2005 2006
(audited)
---------------------------------------------------
Revenues $524 $746 $1,000 $1,406
Cost of revenues 297 423 571 812
---------------------------------------------------
Gross profit 227 323 429 594
---------------------------------------------------
Operating Expenses:
Selling and
marketing expenses 35 48 67 93
General and
administrative
expenses 46 63 83 119
Amortization of
intangible assets - 1 - 1
---------------------------------------------------
Total operating
expenses 81 112 150 213
---------------------------------------------------
Operating income 146 211 279 381
Gain on sale of
long-term
investment - - - 1
Other income, net 9 14 16 42
---------------------------------------------------
Income before
income taxes and
minority interest 155 225 295 424
Provision for
income taxes 16 26 34 49
---------------------------------------------------
Income before
minority interest 139 199 261 375
Minority interest 1 - 1 2
---------------------------------------------------
Net income $138 $199 $260 $373
---------------------------------------------------
Earnings per equity
share (a)
Basic $0.25 $0.36 $0.48 $0.68
Diluted $0.25 $0.35 $0.47 $0.66
Weighted average
equity shares used
in computing
earnings per
equity share (a)
Basic 541,375,238 551,938,696 540,269,462 550,964,911
Diluted 556,608,116 564,858,570 555,390,222 563,832,673
(a) Adjusted for stock split
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