Infosys Limited (INFY – Free Report) has braved formidable odds like contracted IT spending and unfavorable political climate in the United States to deliver earnings beat in third-quarter fiscal 2018.
The company reported earnings per American Depository Share (“ADS”) of 35 cents for the quarter, which topped the Zacks Consensus Estimate of 25 cents and was up 45.8% on a year-over-year basis. The bottom line benefited from a solid top-line performance and diligent operational execution.
Revenues increased 8% year over year to $2,755 million and topped the Zacks Consensus Estimate of $2,740 million. In terms of constant currency, revenues were up 5.8%.
Top-line growth can be attributed to lucrative client wins and impressive traction of new high growth services and software business. The company’s Renew New Strategy is proving to be a solid growth driver, helping in adding more clients. The company added 79 new clients in the quarter.
Infosys’ investments in new services, particularly in Cloud Ecosystem, Big Data and Analytics, API and Micro services, Data and Mainframe Modernization, Cyber Security and IoT Engineering Services have been showing promising results. In the reported quarter, the company’s offerings have seen increased traction with clients, and contributed 9.9% of the quarterly revenues.
Infosys’ operating profit rose 4.5% year over year to $669 million. Strong focus on operational improvement helped maintain operating profits, despite strong headwinds.
Renew New Strategy Progresses Well
Infosys has been diligently following the “Renew New” program, which lays the blueprint of its long-term growth. The company’s three distinguished offerings — Artificial Intelligence, Knowledge-based IT and Design Thinking — are proving to be key profit churners, aiding in market share expansion.
Infosys Limited Price, Consensus and EPS Surprise