Infosys Ltd ADR(NYSE:INFY) Falls After Quarterly Revenue Miss Estimates


Shares of Infosys Ltd ADR (NYSE:INFY), which consults on business information technology and systems integration, are falling after the company’s fourth quarter revenue trailed analysts’ consensus estimate.

This morning, Infosys reported fourth quarter earnings per share of 85c and revenue of $2.09B, compared to expectations of 79c and $2.11B, respectively. The company’s CEO and Managing Director, S. D. Shibulal, said he was pleased that Infosys was able to double its growth rate for the full year compared to last year, though added that its performance in the last quarter of of the fiscal year had been “disappointing.” The company noted that Infosys and its subsidiaries added 50 clients during the quarter and 238 during the year. Infosys forecast FY15 revenue growth of 7%-9%, compared to consensus of $9.06B.

Infosys said its board had decided to increase the dividend pay-out ratio to up to 40% of post-tax profits effective FY14. Infosys’ current policy is to pay dividends up to 30% of post-tax profits.

Like Infosys, Wipro (WIT) is an IT services and software solution consultant headquartered in India. Others in the business consulting space include Cognizant Technology (CTSH), IBM (IBM) and Accenture (ACN).

In late morning trading, Infosys fell $3.49, or about 6.3%, to $52.09 on nearly twice its average daily trading volume. Shares of Cognizant were down about 0.75% to $48.12, while Wipro was up about 2.6% to $13.56.

Analysts have a consensus price target of $51 on Infosys Ltd ADR (NYSE:INFY) which indicates a 7% downside. The consensus rating of the stock is a BUY with a score of 2.54. There are currently 4 Hold ratings, 1 Sell rating and 8 Buy ratings on the stock.

A recent analyst action consisted of Zacks downgrading the stock from Outperform to Neutral with a price target of $57.


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