INSUBCONTINENT EXCLUSIVE:
Bengaluru/Mumbai: Cognizant will miss the top end of its first-quarter revenue outlook and the IT services firm withdrew its full-year
guidance, as the Covid-19 pandemic takes a toll on its business
The company also drew down on $1.74 billion in debt to boost its financial flexibility and has stopped share buyback.
Revenue in the first
This implies growth of 3.4-3.6%, after stripping out currency fluctuations, and is below the 3.8% growth it had forecast
The company had forecast 2-4% growth, in constant currency terms, for FY2020.
The company said it had been on track to exceed its
delays in project fulfillment, as the company moved to work-from-home and as client demand dropped, particularly in the travel and
Analysts expect limited impact in the Jan-March quarter due to the pandemic, with most of the slowdown coming in the next two quarters
Cognizant joins larger rival Accenture in withdrawing its guidance
Peter Bendor-Samuel, the chief executive of US-based IT advisory and research firm Everest Group
Cognizant said it has taken steps to boost its financial flexibility, including drawing down $1.74 billion on its revolving credit facility
on March 23, 2020, bringing the Company's total cash and investment balance as of March 31st to approximately $4.7 billion
The company also said it has standardized 14-days sick leave from employees diagnosed with Covid-19 or those who need to self-quarantine
This leave will not impact other sick leave or vacation programs
