Tata Consultancy Services Ltd.'s earnings barely grew in the company's fiscal third quarter as higher revenue costs largely offset gains from continued expansion in the European market.
Profit attributable to shareholders rose to 81.18 billion Indian rupees, or 21.63 rupees per share, in the quarter that ended Dec. 31, 2019, from 81.05 billion rupees, or 21.60 rupees per share, in the same quarter in 2018.
The S&P Global Market Intelligence consensus normalized EPS estimate for the fiscal third quarter, which ended Dec. 31, 2019, was 21.97 rupees. Tata Consultancy's earnings in the two previous fiscal quarters also missed expectations.
"We saw the sectoral trends of the first half of the year continue to play out in the third quarter," Tata Consultancy CEO Rajesh Gopinathan said.
COO N. Ganapathy Subramaniam also said the fiscal third quarter was "seasonally weak" due to "furloughs across multiple industry verticals."
Revenue rose year over year in the fiscal third quarter to 398.54 billion rupees from 373.38 billion rupees. However, cost of revenue also increased, to 233.69 billion rupees from 217.35 billion rupees.
Continental Europe led all markets in quarterly revenue growth. Gopinathan said revenues in the region have more than doubled over the past five years.
The life sciences and healthcare segment continued to outperform other business segments, the company said.
As of Jan. 16, US$1 was equivalent to 70.96 Indian rupees.