Cognizant Technology Solutions Surpasses Q3 Profit Estimates

(Reuters) – Cognizant Technology Solutions (NASDAQ: CTSH) exceeded Wall Street profit expectations for the third quarter, benefiting from rising demand as more businesses turn to the IT services provider.

The results indicate a positive shift in the business environment, with clients increasingly depending on Cognizant's IT and consulting services to digitize their operations.

The company's adjusted profit per share was $1.25 for the quarter ending September 30, surpassing estimates of $1.15 per share, according to LSEG data.

CEO Ravi Kumar noted, "We are seeing a gradual rebound of spend cycles and gaining wallet share in financial services" during a post-earnings call.

Cognizant, primarily a consulting firm, is diversifying its portfolio by entering the aerospace and defense sector following its $1.3 billion acquisition of Belcan in June.

In late September, competitor Accenture (NYSE: ACN) also reported strong demand, exceeding quarterly revenue and profit expectations.

Cognizant forecasts fourth-quarter revenue between $5 billion and $5.1 billion, against analysts' predictions of $5.09 billion.

The company now anticipates annual revenue between $19.7 billion and $19.8 billion, up from previous expectations of $19.3 billion to $19.5 billion.

Third-quarter revenue reached $5.04 billion, surpassing analysts' average expectations of $5 billion.