IGATE Profit Falls, But Tops Street; Stock Up - Update

(RTTNews) - IT services provider iGATE Corp (IGTE) Thursday reported a decline in first-quarter profit, hurt by poor margins even as revenue climbed 10 percent on the back of customer additions. Nonetheless, earnings for the quarter topped Wall Street estimates as did revenue.

Moving forward, CEO Ashok Vemuri said market conditions appear bright and the company is going ahead with investments in people and solutions. Following the announcement of its first-quarter results, iGATE shares gained 12 percent in morning trade on the Nasdaq.

Bridgewater, New Jersey-based iGATE posted quarterly net income of $31.6 million or $0.29 per share, compared with $34.8 million or $0.34 per share last year.

Excluding items, adjusted earnings for the quarter were $0.45 per share, compared with $0.51 per share a year ago. On average, eight analysts polled by Thomson Reuters expected earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the first quarter climbed to $302.2 million from $274.9 million in the prior year, topping analysts' expectations of $300.8 million.

The company added nine new customers during the quarter. But results were largely hurt by gross margin that slid to 37.5 percent from 38.1 percent last year.

iGATE said it has secured financing to redeem its $770 million, 9 percent Senior Notes which is expected to yield solid cost savings over the coming quarters.

iGATE stock is trading at $37.22, up $4.02 or 12.10%, on a volume of about 0.40 million shares.