Accenture Beats Q3 Expectations, Lifts FY15 Forecast

Accenture Plc ACN reported stronger-than-expected results for its fiscal third quarter and lifted its forecast for the full year. The Dublin, Ireland-based company posted a quarterly net profit of $840 million, or $1.24 per share, versus a year-ago profit of $868.9 million, or $1.26 per share. Excluding non-recurring items, the company's adjusted earnings came in at $1.30 per share. Its net revenue rose 0.4 percent year-over-year to $7.77 billion, while revenue climbed 10 percent in local currency. However, analysts were expecting earnings of $1.23 per share on revenue of $7.55 billion. The average estimate among 13 Estimize users was for earnings of $1.23 per share and revenue of $7.59 billion. Consulting net revenue rose 1 percent in US dollars to $4.11 billion, while outsourcing net revenue came in flat at $3.66 billion. Revenue from North America climbed to $3.64 billion in the third quarter, versus $3.29 billion in the year-ago quarter. Europe revenue slipped to $2.65 billion from $2.95 billion, while Growth Markets revenue fell to $1.47 billion from $1.50 billion. New bookings totaled $8.5 billion for the quarter, with outsourcing bookings of $4.0 billion and consulting bookings of $4.5 billion. Gross margin for the quarter shrank to 32.5 percent from 32.8 percent, while selling, general and administrative expenses for the quarter declined to $1.33 billion from $1.36 billion. Operating income for the quarter fell to $1.13 billion, versus $1.18 billion in the year-ago quarter. Attrition for the third quarter was 15 percent, versus 14 percent for the year-ago quarter. At May 31, 2015, the company's total cash balance was $4.0 billion, versus $4.9 billion at Aug. 31, 2014. Pierre Nanterme, Accenture's chairman and CEO, said, "We are very pleased with our financial results for the third quarter. We delivered 10 percent revenue growth in local currency, which was broad-based across the business, and we gained significant market share. New bookings of $8.5 billion bring us to $25.5 billion for the first three quarters of the year, demonstrating the continued strong demand for our services. We generated solid free cash flow and returned $1.2 billion in cash to our shareholders, while investing significantly in our business." For fiscal 2015, Accenture now expects adjusted earnings of $4.73 to $4.78 per share, on revenue growth in local currency of 9 percent to 10 percent. The company had earlier expected earnings of $4.66 to $4.76 per share, on revenue growth of 8 percent to 10 percent. The company expects Q4 sales of $7.45 billion to $7.7 billion, versus analysts' estimates of $7.58 billion. Accenture shares fell 0.46 percent to close at $97.80 yesterday.