Cognizant (Nasdaq: CTSH) Q1 In Line, But Guidance Disappoints; Shrs Off

Orlando, FL 5/7/12 (StreetBeat) -- Cognizant (Nasdaq: CTSH) shares are trading sharply lower Monday morning after the IT services company posted disappointing guidance for the second quarter and all of 2012.

For Q1, the company posted revenue of $1.71 billion, up 2.9% sequentially, up 24.8% from a year ago, and in line with the Street. GAAP profits of 79 cents a share matches Street estimates.

But guidance fell short of previous Street projections. For Q2, Cognizant sees revenue of $1.79 billion and GAAP profits of 80 cents a share; Street consensus had called for $1.84 billion and 83 cents. For the full year the company forecasts $7.34 billion and profits of $3.36 a share, shy of the Street at $7.54 billion and $3.45 a share.

Previous full year guidance was $7.53 billion and $3.43 a share.

“Due to a slower than anticipated acceleration in demand as we entered the second quarter, we are adopting a more conservative stance for the remainder of the year and revising our guidance to at least 20% revenue growth for 2012,” CEO Francisco D’Souza said in a statement. “We continue to believe that we have the right portfolio of services to sustain our industry leading growth and also meet the changing demands in the market as clients continue to grapple with their dual mandates of cost containment and innovation/business transformation.”

The company also said it is boosting its share repurchase program by $400 million to a total $1 billion; of that total, $423 million has already been repurchased.

CTSH in early trading is down $8.16, or 11.7%, to $61.50.

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