Infosys stock edged up Thursday on September-quarter earnings that met estimates while revenue topped expectations despite headwinds from currency exchange rates. The information technology services firm also announced a buyback of INFY stock.
Infosys released fiscal second-quarter earnings before the market open. Infosys stock popped 5.6% to close at 18.05 on the stock market today.
In the September quarter, the India-based company said it earned 18 cents a share, up 2.5% from the year-earlier period. Revenue rose nearly 14% to $4.55 billion,
Analysts polled by FactSet had estimated an 18-cent profit on revenue of $4.5 billion.
In addition, the company announced a $1.1 billion repurchase program for INFY stock.
INFY Stock: Cloudy Future For The Sector Buyback
"Infosys' margins were up 1.4% quarter over quarter, above estimates, to 21.5% on the back of higher gross margins," said Jefferies analyst Akshat Agarwal, in a report.
He added: "Infosys has narrowed the upper end of its fiscal 2023 margin guidance by 1% to 22% while keeping the lower end unchanged at 21%."
But some on Wall Street still see a cloudy future for the sector.
"We believe IT services companies are experiencing increasing pricing resistance; transformational work has dried up, and large deals have slowed," Susquehanna analyst James Friedman said in a note to clients ahead of Infosys earnings.
Meanwhile, the company competes with India-based Tata Consultancy Services, Cognizant Technology Solutions, Accenture and others.
Heading into the Infosys earnings report, Infosys stock owned a Relative Strength Rating of 42 out of a best-possible 99, according to IBD Stock checkup.
Also, INFY stock has so far retreated 32% this year.
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