IT services provider Cognizant Technology Solutions Corp. reported an increase in its revenue for the last quarter of 2014 which was more than the company’s forecast. The business was able to pick up in revenue growth with the boost of healthcare and financial services spending.
Last Wednesday, the shares of Cognizant went up by as much as 7% and it was able to post a record high of $50.94.
Cognizant, just like its Indian competitors Infosys Ltd. and Tata Consultancy Services, also gets the biggest portion of its revenue from its financial services clients. Meanwhile, the healthcare business of the company which accounts for around a quarter of its overall revenue, was the one which grew the fastest in the later part of 2014.
After the revenue growth of the IT services provider slowed down during the third quarter, its growth picked up before 2014 ended which helped assuage issues regarding spending by clients like hospitals, insurers as well as state-run exchanges that were set up under the Obamacare program or the U.S. Affordable Care Act.
That was what contributed to the increase in the total revenue for Cognizant which was 16.4% or $2.74 in the fourth quarter.
The company gets most of its revenue from North America while most of its employees are based in India. After the rise in healthcare spending, Cognizant forecasts that its 2015 revenue growth would go double-digits and hit at least 19%.
In the fourth quarter alone, the revenue in the healthcare business of Cognizant went up at 26% which was boosted by the acquisition of TriZetto Corp. during the same quarter of the year.
Not including the company’s biggest deal ever, TriZetto, its healthcare revenue went up at 15.2% which is the highest compared to its other major businesses.
The company’s profit increased by 11.9% which is equivalent to $362.9 million translating to $0.59 cents a share. Cognizant earned $0.67 cents per share excluding items which when compared to analysts estimates, is higher by $0.02 cents per share.