Income falls despite flat revenue
India-based IT services provider Tata Consultancy Services has reported an 18% decline in net income to $276.2m for the third quarter 2009, compared to net income of $336.7m in the year-ago quarter, on revenue flat at $1.48 billion. It attributed the decline to an INR2.51 billion ($51.4m) foreign exchange loss.
Operating income grew 6% to $367.2m, while diluted EPS fell 18% to $0.28. It added 41 new customers and 11,773 employees in the quarter. The company said IT and consultancy services revenue grew 3% to $1.44 billion, while equipment and software license revenue fell 52% to $43.7m. Geographically, Americas accounted for 57.3% of the total revenue, EMEA accounted for 30.9%, and Asia Pacific accounted for 11.8%.
For the nine-month period, the company reported an 8% decline in net income to $860.2m, on revenue up 11% at $4.58 billion.
S Mahalingam, CFO at TCS, said: TCS has significant exposure in non-dollar denominated revenues and the depreciation in GBP, Euro, Australian Dollar, and Brazilian Real has meant that the revenues earned in those currencies translated into a lower amount of dollars. This has impacted the revenue and profit growth in dollar terms, though in constant currency and absolute terms, the company’s business continues to grow. In the current environment, it is important to run a tight ship with sustainable cost control measures while continuing to invest for the future.