Cognizant posts slowest Q1 revenue growth in 14 years

The IT outsourcing company managed to beat first quarter earnings target, however.

IT outsourcing company Cognizant Technology Solutions reported first quarter financials on Friday with earnings landing above analyst expectations. But the company lowered the high end of its full year revenue guidance after experiencing its slowest quarterly revenue growth in nearly 14 years.

Cognizant now expects 2016 revenue between $13.65 billion and $14 billion, compared with a prior range of $13.65 billion to $14.20 billion. For earnings Cognizant expects between $3.32 and $3.44 a share.

Wall Street had projected 2016 earnings of $3.39 a share on revenue of $13.9 billion.

Over all, Cognizant reported first quarter profit of $441.2 million, or 72 cents a share, up from $382.9 million, or 62 cents a share, a year earlier.

Non-GAAP earnings were 80 cents a share on revenue of $3.20 billion, up 10 percent from the year-ago period. Analysts were expecting earnings of 79 cents a share on revenue of $3.23 billion.

Revenue from its financial services segment increased nearly 11 percent over the previous year, while revenue from its healthcare segment ticked up 4 percent.

"Overall, our first quarter results were in line with our expectations and guidance. Client demand for our digital expertise, services and technologies remains strong," said Cognizant CEO Francisco D'Souza, in prepared remarks. "We continue to see positive returns from our extensive strategic investment in disruptive technologies, new digital business models and best-in-class delivery capabilities."

For the current quarter, Cognizant expects earnings of 80 cents to 82 cents a share with revenue between $3.34 billion to $3.4 billion. Wall Street is looking for earnings of at least 84 cents a share on $3.41 billion in revenue.