Infosys Technologies Ltd. (NASDAQ:INFY) is seeing shares trade down 4% pre-market in the US after roughly a 6.9% drop in overseas trading on the Mumbai exchange in India. The company posted higher EPS and even raised guidance with $0.48 EPS versus $0.46 estimates and sees next quarter $0.51 EPS versus $0.49 estimates. Revenues also showed a $1 Billion quarter, a first.
There are concerns that currency appreciation may have an impact and the ongoing concern that Infosys won’t see the same growth rates ahead as margins are contracting. The earnings growth for Fiscal March 2008 was raised from 13% to 15%. This compares to year over year growth this last quarter of 18%.
Shares are trading down 4.5% at $52.75 in pre-market trading; the 52-week range is $44.00 to $61.25. To give you an idea of the size of Infosys and Indian IT outsourcing markets, the market cap of Infosys is roughly $31 Billion. The average analyst target going into earnings was $61.00. Outsourcing will likely continue growing, but at first glance it appears the rate at which it will grow may be declining.
Jon C. Ogg
October 11, 2007
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