Shares of iGate Corporation (NASDAQ: IGTE), a provider of integrated end-to-end offshore centric information technology (IT) and IT-enabled operations solutions and services, rose more sharply in pre-market trading today after the company reported better-than-expected third-quarter profit. However, the companyâ€™s third-quarter revenue growth slowed due to delays in contract renewals.
IGTE reported third-quarter net income of $28.3 million, or $0.27 per share, compared to $14.3 million, or $0.10 per share reported for the same period in the previous year. Excluding one-time items, the company reported earnings of $0.46 per share. Revenue for the quarter rose 2% to $271.1 million.
Analysts surveyed by Thomson Reuters were expecting iGate to report third-quarter earnings of $0.37 per share and revenue of $277.2 million.
Gross margin for the third quarter ended September 30, 2012 was 39.8%, compared to 36.9% reported for the same period in the previous year.
Phaneesh Murthy, CEO of iGate, said that on the revenue outlook, it has not been a happy quarter with extended lead-time in client decision making and contract renewals slowing revenue growth. Murthy said that from a margin perspective, however, he is extremely pleased with the companyâ€™s profitability as it continues to sustain strong gross margins and adjusted EBITDA.
Sujith Sircar, CFO of iGate, said that he is pleased that IGTEâ€™s corporate restructuring is proceeding according to a schedule as the company moves towards its vision of one company. Sircar said that he is also pleased to report that the company continued to maintain high earnings growth. However, he cautioned that the volatility in the foreign exchange market remains to be a cause of concern.
IGTE shares rallied in pre-market trading today following the release of the companyâ€™s quarterly results. At last check in pre-market trading, the stock was up more than 6%.