Q1:14 HIGHLIGHTS

• Revenues and EPS beat consensus. Revenues came in at $219.5 million versus our estimate of $208.0 million and slightly ahead of consensus at $218.4 million. EPS came in at $1.39, beating our estimate of $1.25 and consensus at $1.32.
• Revenue guidance was provided at $915-940 million (mid-point of $927.5 million), raised slightly versus previous guidance of $910-940 million (mid-point of $925 million), but still below consensus of $932.1 million and our estimate of $915.67 million. EPS guidance was lowered to $5.10-5.28 (mid-point $5.19) versus prior guidance of $5.10-5.35 (mid-point $5.22), well below consensus of $5.36 and our estimate of $5.29.
• We lower our FY:14 EPS estimate to $5.20 from $5.29 and maintain our SELL rating and a target price of $76.00

RISKS

• BPO and IT Spending could strengthen further as the US economy continues to strengthen, and/or firms look to outsource to save costs.
• SYNT and other IT firms could successfully lobby Congress to exclude the outplacement provision (15% visa cap) in the next version of the Immigration Reform Bill, removing the overhang.
• Rupee appreciation gets fully priced into consensus and the currency does not appreciate further.