Results indicate offshoring's appeal for businesses looking to reduce costs in tough times.
Indian outsourcer Wipro reported solid second quarter performance, a sign that U.S. businesses continue to look to offshore outsourcing as a means to reduce expenses during the recession.
Wipro said Wednesday that second quarter revenues increased 6% year-over-year, to $1.3 billion. Net income jumped 31% to $224 million, while earnings per share also climbed 31%, to $0.15. The company said it expects to earn $1.04 billion from IT services alone in the third quarter.
"We are starting to see the first signs of stability in the business as ramp downs start to taper off and volumes start to stabilize," said Wipro chairman Azim Premji, in a statement. "We are adapting ourselves to the new reality with continued investments in value creation, go-to-market, and driving significant operational productivity," said Premji.
Wipro also reported that its workforce, which is almost exclusively based in India, has grown to more than 98,000 employees.
Other signs indicate that India's tech services economy is defying the downturn. IBM last week stated that its revenues from the country grew modestly in Big Blue's most recent quarter. By contrast, sales were down sharply across the board in most other regions.
It's not all good news for the outsourcing industry, however.
Market watchers at Technology Partners International released a report earlier this week that showed that the number of outsourcing contracts worth more than $25 million inked in the first half fell 11% compared with the first half of 2008. Total contract value was off 22%.
"Companies have been more tentative and tactical about making sourcing decisions as they try to navigate these challenging economic times," said TPI's Mark Mayo, in a statement.
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