Infosys profit down on visa investigation

Oct 11, 2013 by Kay Johnson

Indian IT outsourcing giant Infosys posted a fall in quarterly profit Friday after setting aside funds for a visa-abuse investigation in the United States. Still, the company upgraded its revenue forecast for the year, pleasing investors.

Shares in Infosys rose 4 percent in Mumbai after the raised the low end of its revenue growth forecast to 9 to 10 percent for the fiscal year ending March 2014, up from 6 to 10 percent.

Infosys said for the July-September quarter dropped 11.1 percent from the previous year to $383 million.

Part of that fall was due to $35 million set aside for the possible resolution of an ongoing dispute with U.S. authorities over whether it misused temporary visas to bring Indian workers into its largest market.

"Infosys is engaged in discussions with the U.S. Attorney's office and other government departments regarding a civil resolution of the government's investigation into the company's compliance" with temporary visas for tech workers known as B-1 visas, Infosys said in an addendum to its quarterly report.

Without that $35 million provision, net profit for the quarter would have been down 2.7 percent. The company said it could not comment further on the investigation because it is ongoing.

Labor advocates say the temporary visas for technology workers in the U.S., known as B-1 visas, are used by Indian outsourcers to bring in cheap software experts in to work in the U.S. instead of hiring American workers. Outsourcers argue that they need their own experts to install software developed in India.

Infosys posted year-on-year of 15 percent to $2.1 billion. The positive numbers prompted the company to upgrade its annual revenue outlook, though it remained conservative because company officials said the next two quarters are traditionally weak. Infosys shares rose 4 percent to 4,209 rupees on the Bombay Stock Exchange.

The company also reported landing 68 new clients in the quarter, including five worth more than $50 million each that are expected to increase in the long-term.

In local currency terms, Infosys posted modest profit growth of 1.6 percent in profit for the quarter, thanks to the sharp depreciation of the Indian rupee that lost one-sixth of its value earlier this year, though it has somewhat recovered.

Indian outsourcers benefit from a weak rupee because most of their business comes from the United States and Europe and is paid in dollars and euros.

Explore further: Infosys profits up slightly despite currency woes

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Infosys profits up slightly despite currency woes

Jul 12, 2013

Indian software outsourcing giant Infosys posted slightly higher quarterly profit Friday and maintained its revenue growth forecast despite the weak rupee and uncertainty about U.S. visas for its employees.

Infosys profit up 5 percent, misses expectations

Oct 12, 2012

Profit at India's Infosys Technologies rose 4.9 percent in dollar terms for the September quarter, the company said Friday, missing expectations amid tepid demand from global clients struggling with economic uncertainty.

India's Infosys cuts revenue outlook, shares tumble

Jul 12, 2012

Shares in Indian software giant Infosys fell more than eight percent on Thursday after the company announced a surprise cut its full-year revenue outlook and reported a lower-than-expected profit.

India's Infosys shares fall on US probe worries

Apr 23, 2012

Shares in Infosys, India's second-largest outsourcing firm, fell four percent in Mumbai on Monday after the firm revealed that US authorities were probing alleged irregularities in its business visas.

Recommended for you

SK Hynix posts Q1 surge in net profit

1 hour ago

South Korea's SK Hynix Inc said Thursday its first-quarter net profit surged nearly 350 percent from the previous year on a spike in sales of PC memory chips.

Zynga founder Pincus leaving operations role

12 hours ago

Online game maker Zynga says company founder Mark Pincus is stepping down as chief product officer, less than a year after he was replaced as the company's CEO.

Amazon Prime wins streaming deal with HBO

16 hours ago

Amazon scored a deal Wednesday to distribute old shows from premium cable TV channel HBO to its monthly Prime subscribers, landing a blow on rival Netflix in the streaming video battle.

User comments : 0

More news stories

FCC to propose pay-for-priority Internet standards

The Federal Communications Commission is set to propose new open Internet rules that would allow content companies to pay for faster delivery over the so-called "last mile" connection to people's homes.

SK Hynix posts Q1 surge in net profit

South Korea's SK Hynix Inc said Thursday its first-quarter net profit surged nearly 350 percent from the previous year on a spike in sales of PC memory chips.

Brazil enacts Internet 'Bill of Rights'

Brazil's president signed into law on Wednesday a "Bill of Rights" for the digital age that aims to protect online privacy and promote the Internet as a public utility by barring telecommunications companies ...

Is nuclear power the only way to avoid geoengineering?

"I think one can argue that if we were to follow a strong nuclear energy pathway—as well as doing everything else that we can—then we can solve the climate problem without doing geoengineering." So says Tom Wigley, one ...

When things get glassy, molecules go fractal

Colorful church windows, beads on a necklace and many of our favorite plastics share something in common—they all belong to a state of matter known as glasses. School children learn the difference between ...

Rising role seen for health education specialists

(HealthDay)—A health education specialist can help family practices implement quality improvement projects with limited additional financial resources, according to an article published in the March/April ...