Accenture reports 26% Q2 profit growth, tops views

Accenture (NYSE:ACN) reported late Thursday that second quarter profit rose 26 percent, beating analyst estimates, and leading to a boost in full year guidance.

For the quarter that ended February 29, the global management consulting, technology services and outsourcing company posted net income of $714 million, or 97 cents per diluted share, compared with $566 million, or 75 cents per diluted share, in the same quarter a year ago.

On average, 21 analysts polled by Thomson Reuters expected earnings of 86 cents per share for the quarter.

The company said the increase reflects higher revenue and operating results, a lower effective tax rate and share count, as well as higher non-operating income.

Net revenues for the latest quarter rose to $6.8 billion, versus $6.1 billion a year earlier. Revenues came in at the top of the company's guided range, it said, and topped analyst estimates of $6.64 billion.

"Given our strong results for the first half of fiscal 2012, we’ve raised our outlook for revenue growth and EPS for the year. We continue to invest to further differentiate our industry and technology capabilities and remain focused on gaining market share and driving profitable growth," said CEO Pierre Nanterme.

Indeed, for the full year, the company raised its outlook for diluted earnings per share between $3.82 to $3.90, six cents higher than the previous forecast of $3.76 to $3.84 per share.

Its guidance for revenue growth also increased to the range of 10 to 12 percent in local currency for the year, up from its prior range of seven to 10 percent.

The company also now expects new bookings for the full fiscal year to be in the upper half of its previously guided range of $28 to $31 billion.
Consulting net revenues for the latest quarter were $3.8 billion, an increase of around eight percent. Outsourcing net revenues rose 19 percent to $3.0 billion.

Its products unit - its biggest segment by revenues, saw sales rise 15 percent to $1.6 billion. The communications, media and technology unit - its second biggest segment by revenues - saw sales increase 16 percent to $1.5 billion.

New bookings for the quarter were $7.94 billion, with consulting bookings of $4.05 billion, or 51 percent of total bookings, and outsourcing bookings of $3.89 billion, Accenture said.

"We are very pleased with our second-quarter performance, which included strong revenue growth in all five operating groups and all three geographic regions," said Nanterme.

"We’re also pleased with our profitability — both the growth in EPS and the expansion of operating margin — due to the disciplined management of our business. We continued to see solid demand for our services, as demonstrated by outstanding bookings of nearly $8 billion, and our balance sheet remains very strong."

Gross margin, which is equal to gross profit as a percentage of net revenues, was 31.1 percent for the quarter, down from 31.7 percent in the year-ago period.

Selling, general and administrative expenses for the quarter were $1.23 billion, up from $1.15 billion in the second quarter of last year.

Geographically, revenues in the Americas in the quarter rose 13 percent to $3.0 billion, and were up eight percent to $2.8 billion in the Europe, Middle East and Africa region. In the Asia Pacific region, sales jumped 23 percent to $971 million.

During the second quarter, Accenture bought back 8.6 million shares for a total of $465 million.

Dublin, Ireland-based Accenture has more than 246,000 people serving clients in more than 120 countries.