Cognizant Is Latest Offshore Outsourcer To Report Big GrowthCognizant Is Latest Offshore Outsourcer To Report Big Growth

Cognizant Technology Solutions is the latest offshore services firm to report blockbuster year-over-year growth. On Monday, the company said third-quarter revenue jumped 52% to $235.5 million from the year earlier. Net income rose 56%, to $40.6 million, while per-share earnings increased 55% to 28 cents. Cognizant is headquartered in Teaneck, N.J., but operates primarily from technology centers in India.

The company added 31 new customers in the quarter. Helping to fuel Cognizant's growth is its focus on industries, such as financial services, that have embraced offshore outsourcing. "We are embedding ourselves even more deeply in our key vertical domains," said Cognizant CEO Lakshmi Narayanan, in a statement. In the quarter, ended Sept. 30, Cognizant said revenue from its financial-services practice increased 14% compared with the previous quarter, while sales from its health-care vertical rose 18% sequentially.

Looking ahead, Cognizant said it expects its revenue for fiscal 2005 to come in at a minimum of $881 million and is expecting per-share earnings of $1.03 for the year.

In recent weeks, a number of major Indian IT services firms, including TCS, Infosy, and Wipro, have reported double-digit increases in sales, while their Western counterparts, including IBM and EDS, have struggled to increase revenue. Analysts say it's a sign that more businesses in the West are becoming comfortable with using lower-cost Indian IT labor.