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Syntel 3Q net income falls with settlement charge

October 20, 2011

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TROY, Mich.—Syntel Inc. said Thursday that its third-quarter net income fell 14 percent -- even though revenue climbed -- as the technology services and outsourcing company logged a previously announced charge for a legal settlement.

For the quarter that ended Sept. 30, Syntel earned $26.2 million, or 63 cents per share, compared with $30.4 million, or 73 cents per share, in the year-ago quarter. Analysts polled by FactSet expected net income of 74 cents per share.

Syntel's net income included a charge of 17 cents per share due to a settlement with an unnamed client. The nature of the settlement has not been disclosed.

Revenue rose 19 percent year over year to $167.6 million. Analysts forecast $163 million in revenue. Syntel said 75 percent of its revenue came from its applications outsourcing business, while 15 percent came from its knowledge process outsourcing business.

"Our pipelines are healthy and client spending patterns remain unchanged, despite the macroeconomic uncertainties," CEO Prashant Ranade said in a statement.

For the full year, Syntel expects earnings of $2.65 to $2.73 per share on $635 million to $640 million in revenue.

Syntel shares fell 14 cents to $47.18 in afternoon trading.