| Raju: Tough going
Hyderabad, Jan. 23: Satyam Computer Services Limited has performed below its own expectations in the third quarter ended December 31, 2002. The company reported a net profit of Rs 116.73 crore, a 2.26 per cent decline, compared with Rs 119.43 crore during the corresponding period last fiscal.
“We regret to inform that our third quarter results are below our expectations and the next quarter is also not going to be in tune with our original anticipation,” B. Ramalinga Raju, chairman of the New York Stock Exchange-listed company, told newspersons here today after the board approved the third quarter results.
Total revenues for the quarter stood marginally lower than the company’s guidance, recording Rs 522.26 crore as against the guidance of Rs 525-540 crore while the earning per share (EPS) was Rs 3.71 compared with a forecast of Rs 4 to Rs 4.2.
Explaining the reasons for not achieving the expected growth, Raju said: “Some of our expectations relating to ramp-up of revenue from specific customers and the fruition of a large deal did not come through. We were negotiating a large deal which was to result in a multi-million dollar revenue but it was put on hold by the customer for internal reasons.”
Declining to spell out the details of the ‘multi-million dollar’ deal that failed to come through, Raju said, “We started negotiations with this customer two quarters ago and the deal, which was to result in a multi-million dollar revenue in each of the quarters, was suddenly put on hold.”
“The changing nature of customers’ IT spending and continued uncertainty in the market has brought in some unpredictability to our forecasts. However, the thrust on offshoring continues to be high, presenting opportunities for long term sustainable partnerships and growth,” the chairman said.
Speaking about initiatives, Raju said that Satyam had taken a new initiative in bioinformatics which will blend well with its customer line of healthcare insurance companies. “We have around 50 people working in this unit.”
The income from software services at Rs 522.2 crore, though falling short of the guidance, reflected a year-on-year growth of 19.85 per cent and a sequential increase of 4.63 per cent over the second quarter, he said.
For the nine-month period ended December 31, 2002, the company recorded a total income of Rs 1,498 crore and a net profit of Rs 343.34 crore.