Satyam Reports 29% Gain in ThirdQuarter Profit (Update2)
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Jan. 21 (Bloomberg) — Satyam Computer Services Ltd., the
worst performer on Indias benchmark index this year, reported
third-quarter profit gained 29 percent as higher billing rates
countered the stronger rupee.
Net income for the three months ended Dec. 31 increased to
4.34 billion rupees ($110 million), or 6.33 rupees a share, from
3.37 billion rupees, or 5 rupees, a year earlier, Hyderabad-based
Satyam said in a statement today. Sales rose 32 percent.
Satyam raised billing rates for managing computer networks
and call centers by the most ever, seeking to boost earnings that
have been eroded by the rupees biggest gain in more than three
decades. The stock has slumped 25 percent this year in Mumbai
trading on concern that profit growth will be further curbed by a
slowdown in the U.S., its biggest market.
“We are monitoring several market factors, including the
economic environment in the U.S., which could have a bearing on
our customers spending, Chairman Ramalinga Raju said in the
statement. “We are confident that the coming weeks will provide
more clarity about the future.
Its overseas shares will be listed on NYSE Euronext next
week to tap investors in Europe, Raju said. NYSE Euronext is the
owner of seven securities markets in Europe and the U.S.,
including the New York Stock Exchange.
The third-quarter profit matched the 4.35 billion rupee
median estimate of 15 analysts polled by Bloomberg.
Stock Performance
Satyam fell 9.1 percent to 338.70 rupees at 10:49 a.m. on
the Bombay Stock Exchange, its biggest decline in almost five
years. The stock had declined 17 percent this year before today,
compared with a 5.9 percent fall in the Sensitive Index.
Infosys Technologies Ltd., Indias second-largest provider
of computer services, on Jan. 11 said it will know next month how
much the slump in the U.S. housing market that has triggered more
than $100 billion of losses among its biggest clients will dent
profit. Some clients have said they may increase spending by 6
percent in 2008, Bangalore-based Infosys said.
Tata Consultancy Services Ltd., Indias largest computer-
services provider, last week said its “cautiously confident
about growth prospects because it expects clients to send more
contracts offshore to cut expenses as the worlds largest economy
falters.
Third-ranked Wipro Ltd. said banks and financial clients are
cutting spending on networks and software as the U.S. economy
falters. Wipro posted the slowest profit growth in almost
three years, trailing analysts estimates, after the rupees
gains curbed earnings from the U.S.
Beating October Forecast
Sales rose to 22 billion rupees for the third quarter,
compared with the analysts estimate of 21.6 billion rupees. The
revenue also beat the companys October forecast of as much as
21.1 billion rupees.
Satyam raised its sales-growth forecast for the year ending
March 31 to as much as 29.2 percent under Indian accounting rules,
from an October prediction of 26.7 percent. Earnings per share
will climb about 19 percent to 25.50 rupees, Satyam said today.
Thats higher than its October forecast of 25.10 rupees.
Under U.S. accounting rules, which exclude the impact of
currency fluctuations, Satyam forecast earnings of $1.27 for the
current fiscal year, and sales of as much as $2.12 billion.
Thats an increase from an October forecast of $1.24 in earnings
on a per-share basis, and revenue of as much as $2.08 billion.
Satyam also agreed to buy Chicago-based Bridge Strategy
Group for $35 million. The firm employs 36 management consultants
and generates $17 million in annual sales.
Satyam had spent less than $50 million over the last three
years on three prior acquisitions: the U.K.s Nitor Global
Solutions Ltd. and Citisoft Plc, and Singapores Knowledge
Dynamics Ltd.
Earnings before interest, taxes, depreciation and
amortization as a percentage of sales, a measure of profitability,
narrowed to 21.5 percent in the third quarter from 24.7 percent a
year earlier.
To contact the reporters on this story:
Harichandan Arakali in Mumbai at
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