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Despite Bomb Blast, Infosys Shares Rise On Big Quarterly Gains

Revenues for the three months ended June 30 jumped 39%, net income climbed 43%, and the company added 38 new customers.
Indian-based outsourcer Infosys Technologies reported strong gains in first-quarter revenue and profits as an increasing number of U.S. businesses send IT work offshore in order to cut costs.

Infosys said revenues for the three months ended June 30 jumped 39% to $660 million, while net income climbed 43% to $174 million. Per-share earnings rose 40% to 63 cents. The company added 38 new customers in the quarter and more than 8,000 employees. Its head count now stands at 58,400.

Looking ahead, Infosys said it expects revenue for the fiscal year ending in March to fall between $2.91 billion and $2.92 billion. Earnings per share are expected to come in at between $2.70 and $2.73.

It's not all rosy for Infosys, however. India's labor market is tightening and tech salaries are rising about 15% annually. The cost of prime business real estate is also going up. In the first quarter, Infosys' operating expenses rose 46%, outpacing revenue growth.

Infosys and its Indian peer group--including Wipro Technologies, TCS, and Satyam Computer Services--must also now contend with any customer jitters caused by Tuesday's bomb blasts in Mumbai. The death toll from the train explosions stands at 183, according to the Associated Press.

India's financial markets appear to be taking the news in stride, however. The Sensex closed up 3% Wednesday to 10,930, partly on the strength of Infosys' robust report. In premarket U.S. trading, Infosys ADRs were up 9% to $78.01.