Cognizant Technology Solutions has reported a net profit of $240 million for the fourth quarter ending December 2011. This is a 16.4 percent increase over $206 million reported in the corresponding quarter of last year and 5.7 percent increased sequentially.

We are very pleased, once again, to deliver industry leading revenue growth in 2011 while maintaining stable margins and investing for our long-term success, Cognizant CEO Francisco D'Souza said.

Revenue for the fourth quarter of 2011 rose to $1.66 billion, up 26.9 percent from $1.31 billion. Cognizant expects the revenues for the entire 2012 to be at least $7.53 billion, up at least 23 percent compared to the last year. For the full year 2011, the company posted a net income of $883.6 million, up 20.46 percent from $733.5 million in 2010.

A likely cutback in IT spending in Europe, battling a sovereign debt crisis is expected to hit the industry. Macroeconomic issues in Europe continue to result in volatility in discretionary spending in life-sciences and financial services, said Gordon Coburn, the president of Cognizant. We are not expecting a rebound in Europe later this year, he added.

While Cognizant is Nasdaq-listed and based in New Jersey in the U.S., the company traces its origins to Chennai with a local venture of Dun and Bradstreet, and most of its 130,000 employees are based in India. During 2012, Cognizant is likely to spend $370 million on capital expenditure with most of this spending expected to be in India.