Submitted by Fox First at Ten on October 12th
LOS ANGELES (AP) - U.S.-traded shares of Indian technology company Infosys Ltd. fell Friday as investors worried about the company's growth prospects if large companies spend less on information technology.
THE SPARK: The company's results in its latest quarter, which ended in September, fell short of analyst expectations.
It earned 75 cents per share on revenue of $1.8 billion. Analysts polled by FactSet expected profit of 77 cents on revenue of $1.9 billion.
Looking forward, the company cut its profit forecast for the year through March 2013 because of recent changes in currency values, to at least $2.97 per share from at least $3.03 per share. Analysts expect profit of $3.04 per share.
THE BIG PICTURE: Infosys provides business consulting, technology, engineering and outsourcing services for clients in more than 30 countries. Infosys gets nearly two-thirds of its revenue from the United States and over 98 percent of its revenue from outside India.
The company's CEO said "global economic uncertainties" were affecting the industry.
THE ANALYSIS: William Blair & Co. analyst Bhavan Suri was also cautious. "We believe that the company is beginning to witness a slowing in (information technology) spending from large corporations due to the rather uncertain global economic environment," Suri said in a research note Friday.
Suri noted that the company added 39 new customers in the quarter, the lowest number since the first quarter of 2011.
SHARE ACTION: Infosys' U.S.-traded shares fell $4.14, or 8.6 percent, to $44.08 in late afternoon trading. They have traded in a 52-week range between $37.93 and $61.48.
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