Satyam 2nd-Quarter Profit Rises 42%, Beats Estimates (Update2)
By Harichandan Arakali
Oct. 17 (Bloomberg) -- Satyam Computer Services Ltd., India's fourth-largest computer-services provider, reported profit growth that beat estimates, easing concern that corporations are scaling back technology-related spending.
Net income rose 42 percent to 5.81 billion rupees ($119 million), or 8.63 rupees a share, in the quarter ended Sept. 30, from 4.09 billion rupees, or 6.12 rupees, a year earlier, Hyderabad-based Satyam said in a statement today. Profit beat the 5.47 billion rupee median in a Bloomberg survey of eight analysts.
The company raised its annual profit forecast as the rupee's decline increased the value of Indian exports, helping Satyam join Infosys Technologies Ltd. and HCL Technologies Ltd. in reporting higher profit for the latest quarter. Satyam shares are headed for their biggest annual drop since 1995 amid concern that the global credit crunch will discourage spending for computers and related services.
``Things at this point may not be as bad as the stock price is suggesting,'' Apurva Shah, head of research at Prabhudas Lilladher Pvt., said in a telephone interview from Mumbai. ``Pretty decent numbers, I think.''
Satyam gained 2.9 percent to 279.7 rupees at 12:21 p.m. in Mumbai trading, the fourth-highest gain among stocks in the benchmark Sensitive Index.
Forecast
The slowdown faced by financial-service firms will spread to manufacturing and retail customers, Satyam Chief Executive Officer Rama Raju said in a conference call. Raju's comments echoed concerns voiced by Infosys Chief Executive Officer S. Gopalakrishnan, who said in an interview yesterday that the effect of the slowdown will be widespread.
Satyam forecast earnings will be 33.57 rupees to 34.10 rupees a share in the year ending March 31, revising a July projection of 31.83 rupees to 32.35 rupees a share.
The company cut its full-year sales forecast under U.S. accounting rules, projecting $2.55 billion to $2.59 billion, missing the low end of a July forecast of $2.65 billion. Under Indian accounting rules, Satyam raised the high end of its estimate to 114.8 billion rupees from 113.6 billion rupees.
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