Indian IT outsourcer Infosys (INFY) reported results for its fiscal year 2013 first quarter on Thursday. The firm’s earnings grew 8.2% to $0.73 per share, while revenue grew to $1.75 billion, up 4.8% when compared to the same quarter a year ago. Though earnings were higher than expected, drastic revenue guidance cuts stole the show.
In April, Infosys guided to revenue growth to the 8-10% range, but now expects revenue to grow at a 5% clip. The firm specifically cited weakness in the financial services segment, which is under pressure due to constrained profitability. Earnings per share are also expected to only grow 1% for the year. Infosys is yet another technology firm to cut guidance, joining Informatica (INFA), Applied Materials (AMAT), AMD (AMD) and Seagate Technologies (STX).
We think business investment is slowing and that this weakness could hurt several players in the industry. We wouldn’t be stunned if business giants like Oracle (ORCL), SAP (SAP), Accenture (ACN) and Wipro (WIT) stumble a bit in the second half of 2012.