Cognizant Technology Solutions (Nasdaq:CTSH) announced its results for the second quarter on August 6, 2012. Cognizant Technology Solutions provides custom IT consulting and technology services as well as outsourcing services for companies in North America, Europe, and Asia.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: How To Decode A Company's Earnings Reports

The Numbers: Cognizant Technology beat expectations with its latest EPS and revenue figures. The company reported 82 cents per share versus the 81 cents per share estimate and revenues of $1.8 billion versus the $1.71 billion estimate. EPS rose 22.4% while revenue climbed 20.9% from the same period last year. Cognizant Technology has averaged revenue growth of 27.7% over the past five quarters. The company's net income for the quarter rose 21.1% to $251.9 million. Last quarter marked the third in a row of rising net income.

Management Quote: "Clients continue to turn to Cognizant to help reinvent their business models in the face of secular industry changes, evolving demographics, and a new stack of social, mobile, analytics, and cloud technologies," said Francisco D'Souza, Chief Executive Officer. "We are well positioned to capitalize on these opportunities due to our unique combination of management consulting and operational capabilities in areas such as large scale program management and change management. With our robust global delivery model, we make the complexities of managing large scale transformation programs seamless and transparent to our clients."

A Look Back: Margins rose in the first quarter after falling the quarter before. Gross margin grew 0.5 percentage point from the year-earlier quarter to 42.6%. In the fourth quarter of the last fiscal year, the figure rose 0.5 percentage point to 42.5% from the year earlier quarter.

Net income has increased 17.4% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 21.1% from the year-earlier quarter.

Looking Ahead: Analysts appear increasingly negative about the company's results for the next quarter. The average estimate for the third quarter has moved down from 89 cents a share to 86 cents over the last 90 days. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is $3.36 per share, down from $3.45 90 days ago.