Syntel, Inc. (NASDAQ:SYNT). suffered a steep decline after reporting lower than expected revenue for the third quarter. The company also reduced its fiscal 2014 revenue outlook.
The stock price of Syntel, Inc. (NASDAQ:SYNT) dropped 10% to $81.46 per share at the time of this writing around 1:59 in the afternoon in New York.
The company provides information technology (IT) and knowledge process outsourcing (KPO) services to Global 2000 companies.
For the third quarter, Syntel, Inc. (NASDAQ:SYNT) reported a 3% increase in earnings to $1.47 per share from $1.42 in the same period a year earlier. Its revenue went up 9% to $228.33 million from $209.87 million last year.
Wall Street analysts expected Syntel, Inc. (NASDAQ:SYNT) to deliver earnings of $1.39 per share and $236.95 million in revenue.
Syntel, Inc. (NASDAQ:SYNT) said its gross margin for the current quarter declined 41.4% from 46.6% last year. Its selling, general and administrative (SG&A) expenses increased to11.6% of its revenue. Its net income from operations was 29.8% of its revenue, down from 35.9% in the year-ago quarter.
The company spent $5.1 million in capex during the period to support its campus infrastructure. Syntel, Inc. (NASDAQ:SYNT) ended the quarter with $808.7 million in cash and short-term investments. The company has 24,333 employees globally by the end of the period.
Syntel experienced temporary headwinds
In a statement, Nitin Rakesh, president and CEO of Syntel, Inc. (NASDAQ:SYNT) said the company’s healthcare and life science segment experienced some temporary headwinds affected its fiscal 2014 growth outlook.
“We remain confident that the healthcare industry holds considerable promise for future growth and we continue to invest in all segments of the industry, especially in evolving needs of the market, and are well-positioned to benefit from this long-term trend,” said Rakesh.
In addition, Rakesh said Syntel, Inc. (NASDAQ:SYNT) continues to deepen its ties with existing customers and adding new relationships that would provide significant foundation for its growth in the future. According to him, the company is investing in strategic areas such as digital transformation to help its customers adopt changes impacting their businesses.
For the fiscal 2014, Syntel, Inc. (NASDAQ:SYNT) expected to achieve revenue in the range of $908 million to $915 million. The company estimated to generate earnings in the range of $5.60 to $5.70 per share.
Its current fiscal 2014 revenue estimate was lower from its previous expectation in the range of $920 million to $940 million. Its current earnings estimate is higher from the previous $5.50 to $5.65 per share.