Infosys Technologies (NASDAQ: INFY) Announces Results for the Quarter Ended September 30, 2010

Oct 15, 2010, 01:40 ET from Infosys Technologies Ltd

    BANGALORE, India, October 15, 2010 /PRNewswire-FirstCall/ --
    - Q2 Revenues Grew by 29.6% Year on Year; Sequentially Grew by 10.2%
    Highlights
    Consolidated results under IFRS for the quarter ended September 30, 2010

    - Revenues were $1,496 million for the quarter ended September 30, 2010;
      QoQ growth was 10.2%; YoY growth was 29.6%

    - Net income after tax was $374 million for the quarter ended September
      30, 2010; QoQ growth was 14.7%; YoY growth was 18.0%

    - Earnings per American Depositary Share (ADS) was 0.65 for the quarter
      ended September 30, 2010; QoQ growth was 14.0%; YoY growth was 16.1%

    - 27 clients were added during the quarter by Infosys and its
      subsidiaries

    - Gross addition of 14,264 employees (net addition of 7,646) for the
      quarter by Infosys and its subsidiaries

    - 1,22,468 employees as on September 30, 2010 for Infosys and its
      subsidiaries

    - Declared an interim dividend of `10 per ADS and a 30th year special
      dividend of `30 per ADS (equivalent to an interim dividend of $0.22 and
      30th year special dividend of $0.67 per ADS, at the prevailing exchange
      rate of `44.50 per US$). The record date for the payment of dividend is
      October 22, 2010.

"Though the economic environment continues to be challenging, we have leveraged our client relationships, solutions and investments to grow faster in this quarter," said S. Gopalakrishnan, CEO and Managing Director. "There are significant drivers for investment in Information Technology since any transformation program to 'build tomorrow's enterprises' requires these investments to be made. We are partnering with our clients on these initiatives."

Business outlook

The company's outlook (consolidated) for the quarter ending December 31, 2010 and for the fiscal year ending March 31, 2011, under International Financial Reporting Standards (IFRS), is as follows:

    Outlook under IFRS - consolidated#
    Quarter ending December 31, 2010

    - Revenues are expected to be in the range of $1,547 million and $1,562
      million; YoY growth of 25.6% to 26.8%

    - Earnings per American Depositary Share(EPADS) is expected to be in the
      range of $0.66 and $0.67; YoY growth of 11.9% to 13.6%

    Fiscal year ending March 31, 2011##

    - Revenues are expected to be in the range of $5.95 billion and $6.00
      billion; YoY growth of 24.0% to 25.0%

    - Earnings per American Depositary Share(EPADS) is expected to be in the
      range of $2.54 and $2.58;YoY growth of 10.4% to 12.2%

# Exchange rates considered for major global currencies: AUD / USD - 0.97; GBP / USD - 1.58; Euro / USD - 1.36

## Excluding the income from the sale of our investment in OnMobile Systems, Inc. of USD 11mn in fiscal 2010, the EPADS growth is expected to be in the range of 11.4% to 13.2%

Expansion of services and significant projects

We continue to expand our offerings, enabling our clients' transformations, managing their operations and accelerating their innovations. We invested in research in new lines of products and services which have been successfully adopted and implemented by our clients.

Transformation

Our solutions have been driving transformation for our existing and new clients, helping them streamline and diversify their businesses.

We are working with a global food and beverage major to enhance systems in their Product Lifecycle Management and Laboratory Information Management System applications. We are helping a Global 1000 CPG convenience foods company consolidate its intranet portals. We are also supporting the global product creation systems for a US-based sportswear and equipment major to help the client build next generation Product Lifecycle Management platforms. We were the sole sourced consultancy for improving quality management processes for the IT wing of a leading white goods company.

A leading manufacturer selected us as its partner to modernize its business systems by reducing complexity in process applications, minimizing costs and improving responsiveness. We are working with a major oilfield service provider, to develop and support technology products that will help oil and gas operators optimize production. We were selected by an international power company to work on its global financial consolidation project.

We are working with a publication house to transform its order management value chain to increase revenues and improve customer engagement. We defined the mobility roadmap for the US sales force of a leading agribusiness company to improve the client's effectiveness and customer responsiveness. A global financial services company selected us to roll out a new broker / dealer platform for its client and advisor base.

Operations

We continue to successfully manage and meet our clients' operational requirements, delivering higher returns on their investments.

We are working with the research and development team of a multinational computer manufacturer to develop processes and systems to manage software projects, resulting in efficiencies and cost savings. We are managing the flagship data center platforms and products for a leading US-based infrastructure management products company, enabling the client to focus on the development of next generation product platforms. We were chosen by a computer major to deliver next-generation software to manage servers and enable remote access services. We are helping a global consumer electronics company expand its retail supply chain platform to handle increased volumes and provide better service.

We delivered a program to optimize key business processes for an energy services provider in the US. A global oil and gas major selected us to set up and support a middleware infrastructure and integration layer that will integrate its trading applications. A global energy company selected us to implement a new automated SAP invoice payments system that would give it predictable flow of resources in business operations.

We are working with a leading aircraft manufacturer to customize its technical publication software to reduce turnaround time and effort. A large manufacturer of springs consulted us for its business intelligence and data warehousing consolidation. We are helping a major consumer packaging company to create a single globally integrated human resources information system. We were selected by a leader in the aerospace and defense sector to conceptualize and design a roadmap for its intranet and corporate communications.

Innovation

Our innovative prowess continues to gain favor with clients.

We are the strategic engineering partner of a leading network equipment company, helping develop its core software platform for next generation products. A US-based technology major engaged us to set up and execute a Center of Excellence focusing on quality assurance services for critical applications.

An aircraft equipment manufacturing major has solicited our help with aircraft wing structure and system integration design for a large new commercial aircraft program. We are carrying out the detailed design for a new commercial aircraft development program for a leading aerospace supplier. We are also providing post-design support for a large new aircraft program of a major aerospace supplier.

We have developed an innovative mobile navigation application for an online mapping service that has helped the client tap into a large mobile user base. A global bank has partnered with us to set up a Compliance Center of Excellence that will enhance its compliance bandwidth while rolling out new strategic programs. We are developing and deploying a mobile sales force enablement solution to enhance productivity for a global orthopedic solutions company. A large US utility is using our services to develop and deploy multiple Smart Grid initiatives that will reduce malfunctions and operational costs.

Liquidity

As on September 30, 2010, cash and cash equivalents, including investments in available-for-sale financial assets and certificates of deposits was $3.9 Bn( US $2.9 Bn as on September 30,2009)

"Our operating margins improved during the quarter while our liquidity position was further strengthened with cash and cash equivalents reaching US $3.9 billion," said V. Balakrishnan, Chief Financial Officer. "However, the continued global economic uncertainty, coupled with extreme currency volatility, is a concern for the industry."

About Infosys Technologies Ltd.

Infosys (NASDAQ: INFY) defines, designs and delivers IT-enabled business solutions that help Global 2000 companies win in a Flat World. These solutions focus on providing strategic differentiation and operational superiority to clients. With Infosys, clients are assured of a transparent business partner, world-class processes, speed of execution and the power to stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered. Infosys has over 1,22,000 employees in over 50 offices worldwide. Infosys is part of the NASDAQ-100 Index and The Global Dow. For more information, visit http://www.infosys.com.

Safe Harbor

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2010 and on Form 6-K for the quarter ended June 30, 2010.These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.

Unaudited Condensed Consolidated Interim Financial Statements prepared in compliance with IAS 34, Interim Financial Reporting

    Infosys Technologies Limited and subsidiaries
    (Dollars in millions except share data)

    Unaudited Condensed Consolidated      September 30, 2010    March 31,
    2010
    Balance Sheets as of
    ASSETS
    Current assets
    Cash and cash equivalents                     $3,427            $2,698
    Available-for-sale financial assets                8               569
    Investment in certificates of deposit            434               265
    Trade receivables                                928               778
    Unbilled revenue                                 235               187
    Derivative financial instruments                   4                21
    Prepayments and other current assets             175               143
    Total current assets                           5,211             4,661
    Non-current assets
    Property, plant and equipment                  1,008               989
    Goodwill                                         183               183
    Intangible assets                                 12                12
    Deferred income tax assets                        69                78
    Income tax assets                                143               148
    Other non-current assets                         116                77
    Total non-current assets                       1,531             1,487
    Total assets                                  $6,742            $6,148
    LIABILITIES AND EQUITY
    Current liabilities
    Trade payables                                    $8                $2
    Current income tax liabilities                   201               161
    Client deposits                                    2                 2
    Unearned revenue                                 133               118
    Employee benefit obligations                      33                29
    Provisions                                        18                18
    Other current liabilities                        430               380
    Total current liabilities                        825               710
    Non-current liabilities
    Deferred income tax liabilities                    1                26
    Employee benefit obligations                      44                38
    Other non-current liabilities                     13                13
    Total liabilities                                883               787
    Equity
    Share capital- `5 ($0.16) par value
    600,000,000 equity shares authorized,
    issued and outstanding 571,201,074
    and 570,991,592, net of 2,833,600
    treasury shares each as of September
    30, 2010 and March 31, 2010,
    respectively                                      64                64
    Share premium                                    697               694
    Retained earnings                              5,096             4,611
    Other components of equity                         2               (8)
    Total equity attributable to equity
    holders of the company                         5,859             5,361
    Total liabilities and equity                  $6,742            $6,148

Infosys Technologies Limited and subsidiaries Unaudited Condensed Consolidated Statements of Comprehensive Income

    (Dollars in millions except share data)

                                  Three months ended        Six months ended
                                        September 30,           September 30,
                                    2010        2009        2010        2009
    Revenues                      $1,496      $1,154      $2,854      $2,276
    Cost of sales                    855         662       1,655       1,305
    Gross profit                     641         492       1,199         971
    Operating expenses:
    Selling and marketing
    expenses                          82          57         156         110
    Administrative expenses          107          85         207         173
    Total operating expenses         189         142         363         283
    Operating profit                 452         350         836         688
    Other income, net                 57          49         110         104
    Profit before income taxes       509         399         946         792
    Income tax expense               135          82         246         162
    Net profit                      $374        $317        $700        $630
    Other comprehensive income
    Fair value changes on
    available-for-sale
    financial assets, net of
    tax effect                         -           -         (1)           -
    Exchange differences on
    translating foreign
    operations                       199       $(10)          11        $226
    Total other comprehensive
    income                          $199       $(10)         $10        $226
    Total comprehensive income      $573        $307        $710        $856
    Profit attributable to:
    Owners of the company           $374        $317        $700        $630
    Non-controlling interest           -           -           -           -
                                    $374        $317        $700        $630
    Total comprehensive income
    attributable to:
    Owners of the company           $573        $307        $710        $856
    Non-controlling interest           -           -           -           -
                                    $573        $307        $710        $856
    Earnings per equity share
    Basic ($)                       0.65        0.56        1.23        1.10
    Diluted ($)                     0.65        0.56        1.23        1.10
    Weighted average equity
    shares used in computing
    earnings per equity share
    Basic                    571,131,367  570,343,178 571,083,717 570,229,204
    Diluted                  571,358,817  571,046,545 571,345,695 570,948,478


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    Contact

    Investor     Avishek Lath, India
    Relations    +91(80)4116-7744
                 Avishek_lath@infosys.com

                 Sandeep Mahindroo, USA
                 +1(646)254-3133
                 sandeep_mahindroo@infosys.com

    Media        Sarah Vanita Gideon, India
    Relations    +91(80)4156-4998
                 Sarah_Gideon@infosys.com

                 Peter McLaughlin, USA
                 +1(213)268-9363 lisa_kennedy@infosys.com
                 Peter_McLaughlin@infosys.com tina_george@infosys.com

SOURCE Infosys Technologies Ltd