Investors were unnerved by the third quarter numbers released by Syntel, Inc. (NASDAQ:SYNT), a provider of IT and knowledge processing outsourcing services. Though EPS was a hair better than estimates, revenue missed.
Shares plunged 14.41% to $22.63, a 52-week low.
On the earnings call, Chairman Bharat Desai attributed the lack luster show to growth challenges from soft global macro trends, specific industry headwinds and regulatory uncertainty in key markets.
“The combination of these forces has created considerable uncertainty for our customers, resulting in decision delays, slower ramps of some existing projects and increased scrutiny of discretionary spending plans,” he added.
Syntel, Inc. (NASDAQ:SYNT) swings to a loss
Syntel reported Q3 loss per share of $2.58 as compared to EPS of $0.92 in the year-ago quarter, and $0.70 in the preceding quarter. (However, Q3 included a $3.21 per share of one-time tax expense associated with a one-time repatriation of cash).
During the quarter, the company paid out a special dividend of $15 per share.
Quarterly revenue fell 5% year on year to $241 million.
Maxim on Syntel, Inc. (NASDAQ:SYNT)
Following the earnings report, analysts at Needham & Co cut their price target to $27, though they reiterated their Buy recommendation.
Analysts at Maxim Group on October 4 reiterated their rating on the stock at a Hold but trimmed their price target from $45 to $28.
However, last month Barrington Research downgraded the stock from Outperform to Market Perform.
Syntel, Inc. (NASDAQ:SYNT) technicals
On the weekly chart, the stock has broken down through $26.50, a support line holding since August 2015, on high volume.
On the monthly chart, the stock has fallen through a topping symmetrical triangle. At the same time it has violated a rising trend line that has cushioned the ascent of the stock from 2009 onwards.
Combined, these present a highly bearish technical picture for Syntel.