Cognizant sees net profit down 29% in Q2; new CFO appointed

Mamtha Asokan | TNN | Updated: Jul 30, 2020, 11:55 IST

CHENNAI: Cognizant’s saw its net profit down 29% at $361 million in the second quarter ended June, as compared to $509 million in the same quarter last year. This is due to Covid-19 and ransomware attack impact.
The company’s revenue declined marginally by 3.4% (2.5% in constant currency) at $4.0 billion.
The revenue decline was mostly in April. Revenue and bookings improved sequentially through May and June, with increased client demand in areas such as cloud and enterprise application services, IT modernization and digital engineering.
Jan Siegmund has been appointed as the new CFO of Cognizant replacing Karen Mcloughin (CFO for past eight years)., McLoughlin will continue to hold office till August 31, and will serve in an advisory capacity till December 2020.
The company has provided guidance in this quarter. For the full year 2020, revenue expected to be in the range of $16.4-16.7 billion, or a decline on a constant currency basis of 2.0-0.5%. This assumes an estimate of a negative 20 basis points foreign exchange impact and a negative 110 basis points impact from the exit of certain content services business.
Speaking on the performance, Cognizant CEO Brian Humphries said "We delivered a solid second quarter performance whilst continuing to improve our competitiveness. Against an uncertain economic backdrop, we remain steadfast in investing in our clients and our associates, and in executing our digital strategy to position Cognizant for accelerated momentum."
Financial Services revenue decreased 5.2% year-over-year, or 4.3% in constant currency, driven by declines in both banking and insurance. Healthcare revenue grew 2.0% year-over-year, or 2.2% in constant currency. Products and Resources revenue decreased 6.5% year-over-year, or 5% in constant currency.
Communications, media and technology revenue decreased 4.4% year-over-year, or 3.2% in constant currency, driven by a negative 790 basis point impact from our 2019 strategic decision to exit certain content-related services.