Infosys (INFY) reported better-than-expected revenues for the third quarter of 2019 while earnings came in shy of estimates. The stock was up 2.9% in premarket hours on Friday.
Total revenues grew 8.4% to $2.98 billion from the year-ago quarter. On a constant currency basis, revenues grew 10.1%. Net profit dropped to $502 million or $0.12 per share from $796 million or $0.17 per share in the prior-year period.
During the quarter, Infosys recorded revenue increases in both its digital and core businesses, with digital revenues growing 33.1% year-on-year to $942 million in constant currency terms. Revenues remained relatively flat across most business segments and geographies on a year-over-year basis. The company secured $1.57 billion in large deal signings during the quarter.
Infosys revised its revenue guidance for fiscal year 2019 to 8.5% to 9% on a constant currency basis. Operating margin guidance was retained at 22% to 24%.
Infosys had previously classified its subsidiaries Kallidus & Skava and Panaya as Held for Sale. During the third quarter, based on evaluation of proposals and negotiations with buyers, the company concluded that the chances of completing a sale by March 31, 2019 were very low.
Accordingly, both assets have been de-classified from Held for Sale and the company incurred additional depreciation and amortization expenses of $12 million in the process. The company also recognized a reduction of $65 million in the carrying value of Skava. Infosys plans to repurpose Skava’s micro services-based business and refocus Panay’s product suite.