Syntel Inc., an information technology outsourcing company, on Thursday reported a 34 percent increase in fourth-quarter profit as improving demand for its offshore services gave a boost to revenue.

The company, which links software developers in India with project managers worldwide, earned $35.8 million, or 86 cents per share, compared with a profit of $26.7 million, or 64 cents per share, in the same quarter a year earlier.

Revenue rose by 12 percent to $117.8 million from $104.7 million.

The quarter beat the forecasts of analysts surveyed by Thomson Reuters, who on average were expecting Syntel to post earnings of 65 cents per share on revenue of $106.4 million.

For the year, Syntel earned $118.5 million, or $2.86 per share, compared with $86.7 million, or $2.10 per share, in 2008.

Looking ahead, Syntel said it expects to earn $2.15 per share to $2.45 per share in 2010 and post revenue of $430 million to $460 million. Analysts had forecast $2.42 per share in profit and $444.8 million in revenue.

The company said it expects demand to continue to improve this year. But it sees costs increasing, due to higher salaries, appreciation in the Indian rupee, and talks centered around a major contract.

Shares of Syntel, based in Troy, Mich., fell 57 cents, or $1.8 percent, to $31.98 in morning trading.