Patni Computer Systems Ltd (PTI) reported earnings per ADS of 38 cents, exceeding the Zacks Consensus Estimate of 34 cents for the third quarter of 2009.

Revenues during the quarter were higher by 3.3% sequentially to $167.2 million from $161.9 million in the preceding quarter. Revenue growth was driven by volume growth of 3.0% (including higher number of days) and 0.3% due to currency impacts. Number of active clients was 283 at quarter end as compared to 294 in the second quarter of 2009.

Gross margin was at 37.1% or $62.0 million against 34.7% or $56.2 million in the previous quarter. Gross profit adjusted for extraordinary items is at $60.9 million at 36.4% during the quarter. Improvement in gross margin is primarily on account of higher utilization and impact of cost rationalization measures.

Sales and marketing expenses during the quarter were $14.2 million at 8.5% as compared to $12.0 million at 7.4% in the previous quarter.

For the quarter, other income (including interest and dividend income net of interest expenses, profit/loss on sale of investments and other miscellaneous income) stood at 3.5% or $5.9 million.

Net income for the quarter at 21.3% was $35.7 million against $28.7 million at 17.7% in the previous quarter. Net income adjusted for extraordinary items was $24.3 million at 14.5% for the quarter.

During the quarter, against net income of $35.7 million, cash from operating activities was $34.4 million. Receivables at the end of the reported quarter were $105.6 million as compared to $100.7 million at the end of the previous quarter. Number of days outstanding (including unbilled) for the current quarter was 75 days, similar to the previous quarter.

Fourth quarter revenues are expected to be $168 million to $169 million. Net income (excluding hedging gain/loss) is expected to be in the range of $24 million to $25 million.

Mr. Vijay Mehra has been appointed as Executive Vice President and Head of Business Verticals. Mr. Naresh K. Lakhanpal has been appointed as President, Patni Americas Inc. Mr. V Mathivanan has been appointed President, APAC and will lead this business from Singapore, where Patni has recently established its new regional headquarters.

Patni Computer Systems Limited is a global provider of IT Services and business solutions, servicing Global 2000 clients. Patni services its clients through its industry-focused practices including banking, financial services (BFS) and insurance (I); manufacturing, retail and distribution (MRD); life sciences; communications, media and utilities (CMU), and its technology-focused practices. Major competitors are Infosys Technologies Ltd (INFY) and Wipro Ltd (WIT).

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