Infosys' stock sinks toward longest losing streak in 2 years after revenue miss

MW Infosys' stock sinks toward longest losing streak in 2 years after revenue miss

By Tomi Kilgore

IT consultant's stock falls toward 10-month low, heads for biggest one-day post-earnings loss in at least 5 years

Shares of Infosys Ltd. continued their selloff Thursday toward a 10-month low, after the India-based information-technology consultant reported fiscal fourth-quarter revenue that missed expectations, and said a contract with a large customer was reduced.

The U.S.-listed stock $(INFY)$ sank 6.4% in premarket trading, putting them on track to open around the lowest closing price seen since June 28, 2023. That would be the biggest one-day, post-earnings decline in at least five years, according to available FactSet data.

The stock was also headed for a seventh straight decline, which would be the longest losing streak since the eight-day stretch that ended April 14, 2022.

For the quarter to March 31, revenue of $4.56 billion was down 2.1% from the previous quarter but up 0.2% from the same period a year ago. The results came up short of the FactSet consensus of $4.61 billion.

The company said during the quarter, it had a "rescoping and renegotiation" of one of the large contracts in the financial services segment, which led to a one-time impact of about one percentage point. Nearly 85% of the contract continued "as-is."

Cost of sales increased 1.7% to $3.22 billion, while operating profit fell 4.2% to $917 million, leading to an operating margin of 20.1%, which was down from 21.0% a year ago.

Net income rose to $914 million, or 23 cents a share, from $830 million, or 18 cents a share, a year ago. The FactSet consensus was for earnings per share of 18 cents.

Free cash flow increased 18.9% to $848 million, which was the highest in the last 11 quarters.

The stock has dropped 7.8% year to date through Wednesday, while the iShares MSCI India ETF INDA has gained 4.4% and the S&P 500 index SPX has advanced 5.3%.

-Tomi Kilgore

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April 18, 2024 08:48 ET (12:48 GMT)

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