Infosys Technologies (NASDAQ: INFY) Announces Results for the Quarter Ended December 31, 2010
BANGALORE, India, January 13, 2011 /PRNewswire/ --
- Q3 Revenues Grew by 28.7% Year on Year; Sequentially Grew by 6.0%
Highlights
Consolidated results under IFRS for the quarter ended December 31, 2010
- Revenues were $1,585 million for the quarter ended December 31, 2010;
QoQ growth was 6.0%; YoY growth was 28.7%
- Net income after tax was $397 million for the quarter ended
December 31, 2010; QoQ growth was 6.1%; YoY growth was 18.9%
- Earnings per American Depositary Share (ADS) was 0.69 for the quarter
ended December 31, 2010; QoQ growth was 6.2%; YoY growth was 16.9%
- 40 clients were added during the quarter by Infosys and its
subsidiaries
- Gross addition of 11,067 employees (net addition of 5,311) for the
quarter by Infosys and its subsidiaries
- 1,27,779 employees as on December 31, 2010 for Infosys and its
subsidiaries
"The weaker economic recovery in developed markets coupled with high unemployment and risk of sovereign default could impact industry growth," said S. Gopalakrishnan, CEO and Managing Director. "We are closely working with our clients as they fine tune their strategies for the future."
Business outlook
The company's outlook (consolidated) for the quarter ending March 31, 2011 and for the fiscal year ending March 31, 2011, under International Financial Reporting Standards (IFRS), is as follows:
Outlook under IFRS - consolidated#
Quarter ending March 31, 2011##
- Revenues are expected to be in the range of $1,601 million and $1,617
million; YoY growth of 23.5% to 24.8%
- Earnings per American Depositary Share (EPADS) is expected to be in the
range of $0.69 and $0.70; YoY growth of 13.1% to 14.8%
Fiscal year ending March 31, 2011###
- Revenues are expected to be in the range of $6.04 billion and $6.06
billion; YoY growth of 25.7% to 26.1%
- Earnings per American Depositary Share (EPADS) is expected to be in the
range of $2.60 to $2.61;YoY growth of 13.0% to 13.5%
# Exchange rates considered for major global currencies: AUD / USD - 1.02; GBP / USD - 1.55; Euro / USD - 1.34
## Excluding the income from the sale of our investment in OnMobile Systems, Inc. of USD 11mn in fiscal 2010, the EPADS growth is expected to be in the range of 16.9% to 18.6%
### Excluding the income from the sale of our investment in OnMobile Systems, Inc. of USD 11mn in fiscal 2010, the EPADS growth is expected to be in the range of 14.0% to 14.5%
Expansion of services and significant projects
We have been increasing our global footprint and diversifying into new areas. We invested in research on new products and services which have been successfully adopted and implemented by our clients.
Transformation
Our solutions have been galvanizing business for our existing and new clients, helping them transform and diversify.
A multi-national retailer in Europe selected us to define its global e-commerce road map and develop strategies to transform its online operations and become a multi-channel retailer. We helped one of the leading grocery retailers in the UK with its strategic workforce management program, resulting in better scheduling and planning processes. We partnered with a cosmetics and beauty products company to design, develop and deploy a Product Lifecycle Management (PLM) system to transform the conceptualization and management of a key product segment.
We developed an enterprise-wide mobility strategy, road map and governance model to help a North America-based paper and building products company to prioritize mobile opportunities. A global provider of content-based workflow solutions selected us to deliver a complex business transformation program and implement new generation business systems.
For a global consumer electronics brand, we helped design a scalable and efficient engineering support model for its cloud-based services. A UK-based telecom service provider engaged us to transform its network and services for trading markets to an advanced Voice over Internet Protocol (VoIP) network. We helped an international voice and satellite service provider transform its internal IT system to enhance employee productivity and flexibility.
We were selected as a strategic partner by an airline company for an IT effectiveness and strategic transformational program. A provider of air and ocean freight forwarding services engaged us to program manage a large multi-year, multinational rollout of a custom global freight forwarding platform. A global automotive company selected us for a strategic engagement to develop a vision for its North American consumer channels, integrating all aspects of customer information.
Operations
We continue to implement our clients' operational requirements, delivering faster time to market and higher return on investment (ROI).
A global consumer electronics brand engaged us to develop a load simulation tool, enabling cost savings through better server capacity planning and utilization. The same client engaged us to create a supply chain platform to unify business processes. A global hi-tech computer systems and services major selected us as its partner for the global implementation of an HR platform, replacing legacy HR systems.
We helped an international perfume and flavor chemical producer evaluate a global sample management system that enables access to relevant information and faster decision-making by harmonizing lab management and sampling processes. We helped a global leader in copper and nickel mining business migrate its plant information systems to Windows 7 platform and offer production support, improving performance and compliance.
We were selected by a leading automotive Original Equipment Manufacturer (OEM) as the single supplier for all development projects, consolidating the work under a shared services structure. We were selected as one of the preferred partners for global sourcing by an automobile manufacturer from Europe. A leading agricultural equipments company selected us to implement Microsoft Enterprise Project Management (EPM) software to streamline, track and improve ROI for planned investments in plant expansion and R&D projects.
A US-based independent natural gas and oil producer engaged us to develop add-on components for its products for improved data access and management. One of the world's biggest oil companies engaged us for a program on data management services in the Exploration and Production (E&P) and drilling domain. A large public utilities company in the US selected us to implement Oracle Outage Management System and Oracle Work and Asset Management System. A US-based global provider of oilfield services engaged us to implement Human Resource Management System (HRMS) and Employee Learning Management (ELM) applications, successfully integrating its disparate HR and learning systems into one global platform.
One of the largest pharmaceutical companies selected us for support and maintenance of business applications and platforms for 16 countries in Europe. A global semiconductor manufacturer engaged us to conduct a full-scale Salesforce.com Customer Relationship Management (CRM) implementation. A world leading provider of professional information solutions engaged us for its HR transformation journey with the implementation of PeopleSoft 9.0 modules. A US-based credit card issuer and commercial bank selected us to perform functional testing services for two major programs to enable quick ramp-up of resources.
Innovation
Our robust innovative practices continue to augur well with clients.
A leading aerospace supplier extended its relationship with us to manage the complete design and analysis of subsystems for its major aircraft programs. This engagement will reduce product development cost and time, and enhance productivity. We are working with a global aircraft manufacturer to develop a unique radio-frequency identification (RFID) based experience theater for their customers. Another global aircraft manufacturer engaged us in aircraft wing structure and system integration design for a large commercial aircraft program.
We are designing and developing a digital mail platform for a document and mail solutions company to provide its customers an option for digital delivery of transaction statements, direct mail and catalogs. A global provider of professional information solutions engaged us to develop a clinical information resource that delivers quick, trusted answers to clinical questions at the point-of-care.
For a global software company, we are developing a platform to identify, evaluate and enable external influencers who can impact its product sales. A global consumer electronics brand partnered with us to develop a mobile application that enhances customer shopping experiences in retail stores by offering next-generation retail experience. We developed a common unified content platform for a US-based internet services company to enhance monetization through improved content relevance. A US-based networking solutions company partnered with us to develop, test and sustain its new unified communications gateway.
A hospitality software company engaged us to help internationalize its software products to address the needs of global markets across the United States, Europe and Asia. One of the world's leading agricultural biotechnology corporations selected us to build a collaboration solution and an integrated content and knowledge management platform.
Liquidity
As on December 31, 2010, cash and cash equivalents, including investments in available-for-sale financial assets and certificates of deposits was US$3.6 bn (US$3.1 bn as on December 31, 2009)
"Uncertainties related to sustainability of the global economic recovery could create greater currency volatility in the near future," said V. Balakrishnan, Chief Financial Officer. "Our focus will continue to be on high-quality growth balancing both the revenue growth and margins."
Board of Directors
The Board of Directors, today appointed Mr. R Seshasayee as an Additional Director of the company with immediate effect. He will hold office up to the date of the Annual General Meeting, when his appointment as a director will be placed for the approval of the shareholders.
Mr. Seshasayee is the Managing Director of Ashok Leyland Limited. A Chartered Accountant, he began his career with Hindustan Lever in 1971, joined Ashok Leyland in 1976, and became Executive Director in 1983, Deputy Managing Director in 1993, and Managing Director in 1998.
Welcoming Mr. Seshasayee, Mr. N. R. Narayana Murthy, Chairman and Chief Mentor, said, "Mr. Seshasayee is a rare corporate leader who brings the best of leadership ideas, governance and ethics. I am honored to welcome him to our board."
About Infosys Technologies Ltd.
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 1,27,000 employees in over 50 offices worldwide. Infosys is part of the NASDAQ-100 Index and The Global Dow. For more information, visit http://www.infosys.com
Safe Harbor
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, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT 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 or expiration 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, 2010 and on Form 6-K for the quarters ended June 30, 2010 and September 30, 2010. These filings are available at http://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.
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)
December March
31, 2010 31, 2010
ASSETS
Current assets
Cash and cash
equivalents $3,314 $2,698
Available-for-sale
financial assets 3 561
Investment in
certificates of deposit 238 265
Trade receivables 969 778
Unbilled revenue 219 187
Derivative financial
instruments 10 21
Prepayments and other
current assets 186 143
Total current assets 4,939 4,653
Non-current assets
Property, plant and
equipment 1,057 989
Goodwill 184 183
Intangible assets 11 12
Available-for-sale
financial assets 6 8
Deferred income tax
assets 73 78
Income tax assets 164 148
Other non-current assets 124 77
Total non-current assets 1,619 1,495
Total assets $6,558 $6,148
LIABILITIES AND EQUITY
Current liabilities
Trade payables $6 $2
Current income tax
liabilities 182 161
Client deposits 5 2
Unearned revenue 128 118
Employee benefit
obligations 28 29
Provisions 18 18
Other current
liabilities 424 380
Total current
liabilities 791 710
Non-current liabilities
Deferred income tax
liabilities 3 26
Employee benefit
obligations 55 38
Other non-current
liabilities 14 13
Total liabilities 863 787
Equity
Share capital-Rs. 5
($0.16) par value
600,000,000 equity
shares authorized,
issued and outstanding
571,296,093 and
570,991,592, net of
2,833,600 treasury
shares each as of
December 31, 2010 and
March 31, 2010,
respectively 64 64
Share premium 699 694
Retained earnings 4,892 4,611
Other components of
equity 40 (8)
Total equity
attributable to equity
holders of the company 5,695 5,361
Total liabilities and
equity $6,558 $6,148
Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Statements of Comprehensive Income
(Dollars in millions except share data)
Three months ended Nine months ended
December 31, December 31,
------------------ ------------------
2010 2009 2010 2009
---- ---- ---- ----
Revenues $1,585 $1,232 $4,439 $3,508
Cost of sales 906 700 2,561 2,005
--- --- ----- -----
Gross profit 679 532 1,878 1,503
--- --- ----- -----
Operating
expenses:
Selling and
marketing
expenses 88 68 244 178
Administrative
expenses 112 82 319 255
--- --- --- ---
Total operating
expenses 200 150 563 433
--- --- --- ---
Operating profit 479 382 1,315 1,070
Other income,
net 65 50 175 154
--- --- --- ---
Profit before
income taxes 544 432 1,490 1,224
Income tax
expense 147 98 393 260
--- --- --- ---
Net profit $397 $334 $1,097 $964
---- ---- ------ ----
Other
comprehensive
income
Fair value
changes on
available-for-
sale financial
assets, net of
tax effect - - (1) -
Exchange
differences on
translating
foreign
operations 38 151 49 377
--- --- --- ---
Total other
comprehensive
income $38 $151 $48 $377
--- ---- --- ----
Total
comprehensive
income $435 $485 $1,145 $1,341
---- ---- ------ ------
Profit
attributable
to:
Owners of the
company $397 $334 $1,097 $964
Non-controlling
interest - - - -
--- --- --- ---
$397 $334 $1,097 $964
---- ---- ------ ----
Total
comprehensive
income
attributable
to:
Owners of the
company $435 $485 $1,145 $1,341
Non-controlling
interest - - - -
--- --- --- ---
$435 $485 $1,145 $1,341
---- ---- ------ ------
Earnings per
equity share
Basic ($) 0.69 0.59 1.92 1.69
Diluted ($) 0.69 0.59 1.92 1.69
Weighted average
equity shares
used in
computing
earnings per
equity share
Basic 571,246,801 570,602,970 571,138,078 570,353,792
Diluted 571,380,888 571,183,310 571,358,432 571,039,216
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Fact Sheet - http://www.prnewswire.co.uk/xferdl?file=h3axSfqtdAddWNz.gpy4.Q
Earnings - http://www.prnewswire.co.uk/xferdl?file=X74W62lCAQAZKAfIRLEV3Q
Contact
Investor Relations
Avishek Lath, India Sandeep Mahindroo, USA
+91(80)4116-7744 +1-646-254-3133
Avishek_lath@infosys.com sandeep_mahindroo@infosys.com
Media Relations
Sarah Vanita Gideon, India Peter McLaughlin, USA
+91(80)4156-4998 +1-213-268-9363
Sarah_Gideon@infosys.com Peter_McLaughlin@infosys.com
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