Infosys beat on the top line but missed Wall Street’s earnings expectations in a Sunday report, sending shares down on Monday. Infosys
500209,
-3.40%
INFY,
-1.69%
reported revenue of $4.44 billion, beating Wall Street’s estimate of $4.37 billion, but the Indian tech giant earned 16 cents a share, lower than expectations of 18 cents a share. Earnings declined from last year, when Infosys reported 17 cents a share, but revenue improved from $4 billion.
“INFY reported mixed Q1/FY23 results, and FY23 guidance, providing plenty of ‘ammunition’ for bulls and bears,” Wedbush analyst Moshe Katri wrote in a note released on Monday. Infosys shares fell 2% to $18.49 on Monday, and have declined 26.9% so far in 2022, compared with the S&P 500’s
SPX,
+0.13%
17.2% decline. The S&P 500 was down 0.4% on Monday Katri noted that Infosys’ constant currency revenue growth — which removes foreign-exchange rates, which have been tough for multinationals due to the strong dollar — exceeded expectations, with robust results in Europe, digital, manufacturing and communications. “Management also pointed to record, robust deal pipeline, with a Q-Q decline in attrition rates,” he added. However, Katri noted Infosys’ earnings miss, with the company’s EBIT margin down 370 BPTS year-over-year. “Management also tightened its FY23’s guided EBIT margin range from 21-23% to the low end of the range, suggesting EBIT margin reaching trough levels,” he wrote. Wedbush lowered its Infosys price target to $25 from $30 and maintained its outperform rating. Opinion: Green tariffs are now our best hope of beating climate change Susquehanna Financial Group noted that, despite major foreign-exchange challenges, Infosys beat top-line estimates. The tech giant also increased its 2023 fiscal year revenue guidance to between 14% and 16% from 13% to 15% in constant currency. “Headwinds from wage inflation due to labor shortages and RTO appear to be particularly intense, and may linger for FY23,” Susquehanna analyst James Friedman wrote. “Still, we view these difficulties as near term.” The analyst firm lowered its second-quarter and full-yea …