Infosys Technologies (Nasdaq: INFY) Announces Results for the Quarter Ended
June 30, 2010
Q1 revenues grew by 21.0% year on year; sequentially grew by 4.8%
BANGALORE, India, July 13 /CNW/ --
Highlights
Consolidated results for the quarter ended June 30, 2010
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<p>Revenues were <span class="xn-money">$ 1,358 million</span> for the quarter ended <span class="xn-chron">June 30, 2010</span>; QoQ growth was 4.8%; YoY growth was 21.0%</p>
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-- Net income after tax* was $ 326 million for the quarter ended June 30,
2010; QoQ decline was 6.6%; YoY growth was 4.2%
-- Earnings per American Depositary Share (ADS)** was 0.57 for the
quarter
ended June 30, 2010; QoQ decline was 6.6%; YoY growth of 3.6%
-- 38 clients were added during the quarter by Infosys and its
subsidiaries
-- Gross addition of 8,859 employees (net addition of 1,026) for the
quarter by Infosys and its subsidiaries
-- 1,14,822 employees as on June 30, 2010 for Infosys and its
subsidiaries
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<p>* Excluding the income from sale of our investment in OnMobile Systems, Inc. of US <span class="xn-money">$ 11</span> mn in Q4 FY10, QoQ decline was 3.6%</p>
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<p>** Excluding the income from sale of our investment in OnMobile Systems, Inc. of US <span class="xn-money">$ 11</span> mn in Q4 FY10, QoQ decline was 3.4%</p>
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<p>"While the global economic environment remains uncertain, we continue to see greater demand for services from our clients," said S. Gopalakrishnan, CEO and Managing Director. "The challenge for the industry is to enhance the investment to grow the business, given the uncertainty in the environment."</p>
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Business outlook
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<p>The company's outlook (consolidated) for the quarter ending <span class="xn-chron">September 30, 2010</span> and for the fiscal year ending <span class="xn-chron">March 31, 2011</span>, under International Financial Reporting Standards (IFRS), is as follows:</p>
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Outlook under IFRS#
Quarter ending September 30, 2010
-- Consolidated revenues are expected to be in the range of $ 1,413
million to $ 1,427 million; YoY growth of 22.4% to 23.7%
-- Consolidated earnings per American Depositary Share are expected to be
in the range of $ 0.59 to $ 0.60; YoY growth of 5.4% to 7.1%
Fiscal year ending March 31, 2011##
-- Consolidated revenues are expected to be in the range of $ 5.72
billion
to $ 5.81 billion; YoY growth of 19.0% to 21.0%
-- Consolidated earnings per American Depositary Share are expected to be
in the range of $ 2.42 to $ 2.52; YoY growth of 5.2% to 9.6%
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<p># Exchange rates considered for major global currencies: AUD / USD - 0.86; GBP / USD - 1.50; Euro / USD - 1.23</p>
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<p>## Excluding the income from sale of our investment in OnMobile Systems, Inc. of US <span class="xn-money">$ 11</span> mn in fiscal 2010, the EPS growth is expected to be in the range of 6.1% to 10.5%</p>
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Expansion of services and significant projects
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<p>With insight and experience of three decades, and improved and enhanced portfolio of services and products, we offer greater value to our clients and stakeholders.</p>
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Transformation
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<p>We continue to drive transformation for our existing clients; a number of new clients have solicited our help to make their businesses more dynamic and profitable.</p>
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<p>A leading aero structures manufacturer engaged our aerospace engineering team to design and develop components for their commercial airplane program. For a global consumer electronics leader, we are re-engineering their global service exchange platform to help meet their growing service needs. A major transformation project we won this quarter was from a large manufacturer of computer systems and provider of related services, in which we are providing business, functional and consulting expertise. A provider of secure electronic payments and credit/debit card processing services engaged us to improve their reporting, monitoring, business intelligence and service. It is also consulting us to analyze and recommend process improvements. A leading global chemical company engaged us to define sales requirements and implement a sales force automation package for their North American sales force. A producer of specialist aluminium products sought our services for globally harmonizing business processes and implementing next generation enterprise resource planning software. For a global specialty retailer, we conceptualized and launched a platform that provides a comprehensive view of their competitors' pricing and assortment. We helped a large UK-based retailer revamp its promotions and improve its marketing effectiveness. A European retailer of office automation services consulted us to harmonize their processes and consolidate applications across <span class="xn-location">Europe</span>. A major transformational project won this quarter was from a leading European pipeline engineering company for whom we have implemented an enterprise resource planning system across 32 countries.</p>
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Operations
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<p>Leading global companies continue to engage us to manage their operations and ensure larger returns to scale for them.</p>
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<p>Our expertise in manufacturing and operations helped us win a deal with a global telecom company. We will run the client's quality and business compliance operations, helping it to offer competitive new products in emerging markets. A European telecom major chose us to design, develop, deploy and maintain an agent desktop application. Among the clients who opted for our product lifecycle management services are a leading oilfield service company and an agri-business major. For a global internet services company, we will develop and maintain a new content management product. A global financial services company selected us to develop a platform for merchants worldwide to deliver card members offers through multiple channels. An investment management company partnered us to implement a new commission system for its wholesale brokers to develop scale and reduce time to market. We managed the North American customer relationship management applications for a manufacturer of automobiles and motorcycles. Another automobile manufacturer selected us as a key partner for development projects in their strategic order management and distribution portfolio. We are implementing a centralized loyalty management system with real time access for a leading retail company. We were instrumental in implementing a single multi-channel order management platform for a reputed British retailer. Our retail solutions team was selected as the single strategic vendor for application services for a North American apparel retailer. We also developed a web property for the B2C online sales for another specialty retailer.</p>
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Innovation
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<p>We have won major strategic projects this quarter on our strength and ability to innovate products and processes.</p>
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<p>A European telecom giant chose us to develop their next generation set top box platform to offer consumers high-definition content and a host of other services. For a large global retailer, we are creating rich mobile applications, with an aim to enhance the shopping experience for their customers. An aircraft manufacturer chose us as their partner to design a new aircraft development program.</p>
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<p>"The volatile currency environment is a concern for the industry," said V. Balakrishnan, Chief Financial Officer. "Our flexible financial and operating model enables us to prioritize our investments and focus on high quality growth even in this tough environment."</p>
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About Infosys Technologies Ltd.
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<p>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 114,000 employees in over 50 offices worldwide. Infosys is part of the NASDAQ-100 Index and The Global Dow. For more information, visit <a href="http://www.infosys.com">www.infosys.com</a>.</p>
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Safe Harbor
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<p>Certain statements in this release concerning our future growth prospects are forward-looking statements, 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 fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in <span class="xn-location">India</span>, 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 <span class="xn-location">India</span>, 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 <span class="xn-location">United States</span> Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended <span class="xn-chron">March 31, 2010</span> and on Form 6-K for the quarters ended <span class="xn-chron">June 30, 2009</span>, <span class="xn-chron">September 30, 2009</span> and <span class="xn-chron">December 31,2009</span>. These filings are available at <a href="http://www.sec.gov">www.sec.gov</a>. 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.</p>
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Unaudited Condensed Consolidated Interim
Financial Statements prepared in
compliance with IAS 34, Interim
Financial Reporting
----------------------------------------
Infosys Technologies Limited and
subsidiaries
--------------------------------
Unaudited Condensed Consolidated Balance
Sheets as of
----------------------------------------
(Dollars in millions except share data)
---------------------------------------
March
June 30, 31,
2010 2010
--------- ------
ASSETS
Current assets
Cash and cash equivalents $3,011 $2,698
Available-for-sale
financial assets 42 569
Investment in certificates
of deposit 393 265
Trade receivables 828 778
Unbilled revenue 228 187
Derivative financial
instruments - 21
Prepayments and other
current assets 156 143
--- ---
Total current assets 4,658 4,661
Non-current assets
Property, plant and
equipment 955 989
Goodwill 178 183
Intangible assets 12 12
Deferred income tax assets 62 78
Income tax assets 123 148
Other non-current assets 127 77
--- ---
Total non-current assets 1,457 1,487
----- -----
Total assets $6,115 $6,148
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LIABILITIES AND EQUITY
Current liabilities
Trade payables $5 $2
Derivative financial
instruments 6 -
Current income tax
liabilities 208 161
Client deposits 4 2
Unearned revenue 125 118
Employee benefit
obligations 30 29
Provisions 18 18
Other current liabilities 383 380
--- ---
Total current liabilities 779 710
Non-current liabilities
Deferred income tax
liabilities 1 26
Employee benefit
obligations 38 38
Other non-current
liabilities 13 13
--- ---
Total liabilities 831 787
--- ---
Equity
Share capital-Rs. 5
($0.16) par value
600,000,000 equity shares
authorized, issued and
outstanding 571,067,501
and 570,991,592, net of
treasury shares as of
June 30, 2010 and March
31, 2010, respectively 64 64
Share premium 695 694
Retained earnings 4,722 4,611
Other components of equity (197) (8)
---- ---
Total equity attributable
to equity holders of the
company 5,284 5,361
----- -----
Total liabilities and
equity $6,115 $6,148
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Infosys Technologies Limited and
subsidiaries
Unaudited Condensed Consolidated
Statements of Comprehensive Income
(Dollars in millions except share data)
Three months
ended June
30,
-------------
2010 2009
---- ----
Revenues $1,358 $1,122
Cost of sales 800 643
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Gross profit 558 479
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Operating expenses
Selling and marketing
expenses 74 53
Administrative expenses 100 88
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Total operating expenses 174 141
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Operating profit 384 338
Other income, net 53 55
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Profit before income taxes 437 393
Income tax expense 111 80
--- ---
Net profit $326 $313
---- ----
Other comprehensive income
Fair value changes on
available-for-sale
financials assets, net of
tax effect of $1 million (1) -
Exchange differences on
translating foreign
operations (188) 236
---- ---
Total other comprehensive
income $(189) $236
----- ----
Total comprehensive income $137 $549
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Profit attributable to:
Owners of the company $326 $313
Non-controlling interest - -
--- ---
$326 $313
---- ----
Total comprehensive income
attributable to
Owners of the company $137 $549
Non-controlling interest - -
--- ---
$137 $549
---- ----
Earnings per equity share
Basic ($) 0.57 0.55
Diluted ($) 0.57 0.55
Weighted average equity
shares used in computing
earnings per equity share
Basic 571,036,067 570,115,230
Diluted 571,332,571 570,818,075
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<p>To view the Fact Sheet and Press Release with tables, please click on the links below:</p>
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http://www.prnewswire.co.uk/xferdl?file=bmt5iSw8Ga7kVLEHrvu0AQ
http://www.prnewswire.co.uk/xferdl?file=n/g4h32RHbQrNMgi/WjHhg
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Investor Relations
Shekar Narayanan, India Sandeep Mahindroo, USA
+91 (80) 4116 7744 +1 (646) 254 3133
[email protected] [email protected]
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Media Relations
Sarah Vanita Gideon, India Peter McLaughlin, USA
+91 (80) 4156 4998 +1 (213) 268 9363
[email protected] [email protected]
For further information: Investor Relations, Shekar Narayanan, India, +91 (80) 4116 7744, [email protected], or Sandeep Mahindroo, USA, +1-646-254-3133, [email protected]; Media Relations, Sarah Vanita Gideon, India, +91 (80) 4156 4998, [email protected], or Peter McLaughlin, USA, +1-213-268-9363, [email protected] Web Site: http://www.infosys.com
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