Infosys beats market expectations, Q1 revenues up 7.5%

Infosys Technologies (NASDAQ: INFY) Announces Results for the Quarter ended June 30, 2007.

Q1 revenues grew sequentially by 7.5%
Guidance revised upwards. Revenues expected to grow 29% - 31% in fiscal 2008

Bangalore, India - July 11, 2007

Infosys Technologies Limited ("Infosys" or "the company") today announced financial results for its first quarter ended June 30, 2007. Revenues for the quarter aggregated $ 928 million, up 40.6% from $ 660 million for the quarter ended June 30, 2006.

"As clients recognize the strategic imperative of global sourcing in an increasingly flat business world, the demand for large end-to-end players like Infosys continues to be strong," said S. Gopalakrishnan, CEO and Managing Director. "We continue to focus on being a partner of choice to our customers."

Infosys saw increasing demand for its business solutions and strong growth in service lines such as consulting, engineering services and package implementation. 35 clients were added during the quarter.

A telecommunications major in the UK aims to roll out services rapidly and realize value faster by deploying a new service management platform from Infosys. A global consumer electronics leader is using Infosys’ technology and domain expertise in Manufacturing Execution Systems (MES) to reduce development costs and achieve faster time-to-market for new product launches. Infosys has been selected as the IT partner in a business transformation initiative undertaken by one of the world’s largest food companies.

Infosys is partnering with an automotive manufacturer in North America to standardize production planning. A global professional services firm is using Infosys’ help to define and build a workflow and collaboration tool for client-facing professionals.

An integrated power and security company worked with Infosys to integrate key business processes on a common platform for increased accuracy of customer data, reduced costs, and a unified customer view. A leading provider of diversified financial services used Infosys’ help to better integrate data from its newly acquired subsidiaries for improved reporting and compliance. A leading electronics and electrical products manufacturer rolled out an Infosys solution to reduce warehouse maintenance and support costs.

A leading UK retailer is working with Infosys to improve scalability and reduce costs by fulfilling customer orders across multiple brands and channels.

Infosys registered new wins in the financial services sector, including two of the largest banks in Europe.

In the UK, a leading housing services provider has selected Infosys to scope, design and implement a business transformation initiative. Infosys is modernizing the legacy IT systems of a leading utility infrastructure operator.

In Canada, Infosys is providing cost-effective best-shoring services to the country’s largest telecom provider. Infosys is providing a suite of services including managed infrastructure and performance management to a wholesale distributor of high-end gifts.

"The sharp appreciation of the rupee against all major currencies impacted our operating margins during the quarter," said V. Balakrishnan, Chief Financial Officer. "However, our robust and flexible operating and financial model enabled us to maintain our net margins while absorbing the impact of appreciating currency, higher wages and visa costs. Liquidity has been further strengthened with cash and cash equivalents reaching US$ 1.6 billion."

Highlights

Consolidated results for the quarter ended June 30, 2007

• First quarter revenues at $ 928 million, up 40.6% from the corresponding quarter last fiscal
• Earnings per American Depositary Share (ADS)* increased to $ 0.46 from $ 0.32 in the corresponding quarter last fiscal
• 35 new clients were added during the quarter.
• Gross addition of 7,004 employees (net 3,730) for the quarter
• 75,971 employees as on June 30, 2007

• Consolidated revenues expected to be between $ 974 million and $ 984 million for the quarter ending
• September 30, 2007 (YoY growth of 30.6% - 31.9%) and between $ 4.00 billion and $ 4.05 billion for the fiscal year ending March 31, 2008 (YoY growth of 29% - 31%)
• Consolidated earnings per ADS* expected to be $ 0.46 for the quarter ending September 30, 2007; (YoY growth of 27.8%) and between $ 1.92 and $ 1.94 for the fiscal year ending March 31, 2008; (YoY growth of 25.5% - 26.8%)
• *** Including tax reversal of US$ 13 mn and US$ 29 mn in fiscal 2008 and 2007 respectively. Excluding the tax reversals the consolidated Earnings per American Depositary Shares are expected to be between $ 1.90 to $ 1.92; YoY growth of 28.4% to 29.7%

Source : Equity Bulls

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