Infosys Technologies Limited (INFY) reported earnings per share of 56 cents, ahead of the Zacks Consensus Estimate of 50 cents, on revenues of $1.15 billion for the quarter ended Sept. 30, 2009.

The company’s strategy through the economic downturn has been to build on its strengths rather than limit itself to navigating the challenges. Following this route, it is confident of emerging stronger when the economic environment improves and it expects to be better poised to deliver enhanced value to all stakeholders. It is sharpening focus on Research & Development, Intellectual Property-based solutions, and New Engagement Models (NEMs) that offer flexible pricing and greater operational control and efficiency to clients.

Clients have been impressed by its engineering services. The company continues to focus on large transformational engagements, especially through consulting and enterprise solution offerings.

The geographic distribution of revenues was as follows: North America (65.9%), Europe (23.2%), India (1.2%) and Rest of the World (9.7%). Insurance, Banking and Financial Services contributed 33.5% of revenues in the quarter, followed by Manufacturing (19.3%), Telecom (16.2%) and Retail (14.1%). From a services perspective, Application Development and Maintenance contributed to 40.8% of revenues followed by Consulting Services and Package implementation (23.8%). Fixed price contracts brought in 38% of revenues while the rest came from Time and Material type contracts.

The number of new clients added during the quarter by Infosys and its subsidiaries was 35, bringing the total number of active clients to 571. There was gross addition of 6,069 employees (net addition of 1,548) for the quarter bringing the total to 1,05,453 employees as on Sept. 30, 2009 for Infosys and its subsidiaries. Utilization, both including and excluding trainees, improved sequentially compared to the previous quarter.

The company has guided revenues in the range of $1.15 – $1.16 billion and earnings per share of 50 cents for the third quarter ending Dec. 31, 2009. The comparable Zacks Consensus Estimate stands at 49 cents.

Infosys defines, designs and delivers IT-enabled business solutions that help Global 2000 companies. Infosys has over 105,000 employees in over 50 offices worldwide. Infosys is part of the NASDAQ-100 Index and The Global Dow. Major competitors include Satyam Computer Services (SAY) and Wipro Ltd (WIT).

We currently have a Neutral recommendation on INFY.

Zacks Investment Research
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