Wipro Q3 Profit Rises 17%, Beats View

(RTTNews) - Indian software services provider Wipro Ltd. (WIT) on Friday reported a 17 percent increase in profit for the third quarter from last year, reflecting revenue growth and client additions.

In dollar terms, earnings per share from continuing operations topped analysts' expectations, while quarterly revenues came in slightly below their estimates. Further, Wipro projects sequential revenue growth for IT Services in the fourth quarter.

Azim Premji, chairman of Wipro, said, "As the global economy is progressing towards stability, we see optimism amongst clients, especially in the West. Corporations are leveraging technology to reduce operational costs and investing resources in differentiating themselves in the marketplace."

The Bangalore, India-based company reported third-quarter net income attributable to equity holders of 20.15 billion rupees or 8.18 rupees per share, up from last year's 17.16 billion rupees or 6.98 rupees per share.

In dollar terms, the company's net income for the latest quarter was $325 million or $0.13 per share. Wipro reports results on the basis of International Financial Reporting Standards.

Net income from continuing operations for the quarter was 20.15 billion rupees or 8.18 rupees per share, and in dollar terms $325 million or $0.13 per share.

The latest quarter's results include a non-recurring expense of 209 million rupees, or $3 million, incurred due to the cessation of manufacturing Wipro branded desktop, laptops and servers. This compares to net income from continuing operations of 15.90 billion rupees or 6.46 rupees per share in the year-ago period.

Excluding the non-recurring expense, adjusted net profit from continuing operations for the latest quarter was 20.15 billion rupees, or $325 million. On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues from continuing operations for the quarter grew 18 percent from the prior-year period to $1.82 billion, or 113.3 billion rupees. Analysts had a consensus revenue estimate of $1.83 billion.

IT Services revenue for the quarter in rupee terms was 103.27 billion rupees, representing a year-over-year increase of 20 percent. In dollar terms, IT services revenue was $1.67 billion, within the company's guidance range between $1.66 billion and $1.69 billion.

Operating margin for IT Services expanded to 23 percent from last year's 20.8 percent. Wipro noted that its investments in automation and productivity tools drove efficiencies and helped expand margins of IT services. The company also said that its IT Services added 42 new clients in the quarter.

IT Products revenues grew 2 percent from the year-ago quarter to 10.16 billion rupees, or $164 million.

Wipro declared an interim dividend of 3 rupees, or $0.051 per share/ADS.

Looking ahead to the fourth quarter, Wirpo forecasts revenues from IT Services business in a range of $1.712 billion to $1.745 billion, including the revenues from its acquisition of Opus CMC.

In early January, Wipro's Bangalore-based peer, Infosys Technologies Ltd. (INFY) reported a 7 percent increase in profit for the third quarter to $463 million or $0.81 per share from $434 million or $0.76 per share in the year-ago period.

Infosys' revenue for the quarter grew to $2.10 billion from $1.91 billion in the same period last year. The group added 54 clients during the quarter.

In Friday's regular session, WIT is trading at $13.16, down $0.36 or 2.66 percent on a volume of 460,468 shares.

On the Bombay Stock Exchange, Wipro closed Friday's regular trading session at 552.45 rupees, down 17.95 rupees or 3.15 percent on a volume of 294,963 shares.