IGATE Corporation (IGTE, Financial) recently announced third-quarter of 2014 revenue of $322.8 million, an increase of 10% over $ 293.4 million during the third quarter last year and increased 3.5% sequentially over $311.7 million during the second quarter of 2014. Analysts had estimated $321.7 million, according to Zacks.
The company reported third quarter of 2014 net income of $37.3 million or non-GAAP diluted earnings per share of $0.52 compared to $31.9 million or $0.46 per share in the third quarter of 2013 and $3.1 million or $0.48 per share during the second quarter of 2014. However, analysts surveyed by Zacks Investment Research had expected earnings of $0.51 per share.
Strong growth in deal count
IGATE was able to successfully maintain its international growth based on both sequential and year-over-year as well. The healthy demand for its industrial solutions improved the capacity and investments in innovative technologies and thus solidifying its value proposition in the market.
IGATE signed second of the three major deals during the quarter. This key deal with a North American client is worth greater than $150 million.
Further, a few other innovative deals have been added to the pipeline. The ITOPS pipeline is into an established phase and now totals $0.5 billion. IGATE is investing into repeatable industry utility solutions for healthcare and insurance clients and reference data management solutions for its banking financial services clients that solidify its position of being a transformational ITOPS solution provider and it has become a major supplier to its expanding pipeline and winning deal.
IGATE added two fresh clients in the third quarter. These include a retail client and the other in its services business making total client addition to 20 as of now. IGATE is keen on implementing a solid client exploring strategy. It is also continuously making excellent progress on its planned priority of enhancing its relationships with present clients by recruiting client services professionals, technical and process architects and domain consultants.
Market across segments
The market in North America is significant for IGATE and has expanded 5% on sequential basis and 9% on year-over-year basis respectively. It aims to include extra capacity in its delivery centers in Halifax, Hartford, El Paso and Pensacola in the forthcoming quarter looking to successfully execute the converted and estimated deals in its pipeline.
IGATE is also constantly investing to expand its reach in Europe, producing 16% growth on a year-over-year basis. U.K. is believed to be the largest market at present. IGATE continues to centre on Nordics, Switzerland and Germany looking at the continued healthy and significant growth opportunity in these countries. IGATE’s delivery centers in Stockholm and Budapest are operating impressively.
The banking financial services witnessed 15% growth on year-over-year basis. The reference data management solution of IGATE specifically designed for clients in this space continue to grow excellently. The life sciences and healthcare, manufacturing segments continued to expand 16% each on year-over-year basis. The product and engineering solutions business illustrated 8.3% growth in the quarter and continue to gain significantly good traction throughout the market.
The horizontal solutions of IGATE continue to grow significantly, mainly BPO, digital and infrastructure management services.
IGATE is focused on its infrastructure expansion plan and has declared a new facility in Noida, India. It has also recruited significantly in Mumbai and Hyderabad.
IGATE expects to continue making investments into hiring talent, its people, its capabilities and its infrastructure for concreting its position as a transformational ITOPS solutions provider.
IGATE has received significant appreciation during the quarter and is ranked 51 in the Fortune’s list of 100 fastest growing companies in the U.S. The company is also appraised at CMMI Level 5.
Conclusion
Hence, IGATE is looking well-positioned to tap the growth in the market, as it is landing a number of deals. So, investors should definitely consider buying this stock for the long run.
