Why Accenture Shares Are Gaining Today

  • Accenture plc ACN shares are gaining over 4% during Thursday morning trading session following its solid Q2 results. The company also disclosed its plan to reduce 19,000 jobs.
  • ACN reported second-quarter FY23 revenue growth of 5% year-over-year to $15.81 billion, beating the consensus of $15.59 billion.
  • New bookings increased by 13% Y/Y to $22.1 billion. Consulting revenues decreased by 1% Y/Y to $8.28 billion, and Managed Services revenues increased by 12% Y/Y to $7.54 billion.
  • Adjusted EPS of $2.69 beat the consensus of $2.50.
  • Adjusted operating margin was 13.8%, an expansion of 10 bps from 2Q22. The gross margin was 30.6% compared to 30.1% a year ago.
  • SG&A expenses for the quarter were 16.7% of revenues, compared to 16.4% in 2Q22.
  • Operating cash flow was $2.33 billion for the quarter, and property and equipment additions were $108 million. Free cash flow was $2.22 billion. 
  • Accenture’s total cash balance as of Feb. 28, 2023, was $6.2 billion.
  • Dividend: Accenture declared a quarterly cash dividend of $1.12 per share, payable on May 15, 2023, for shareholders of record on Apr. 13, 2023. 
  • During the quarter, Accenture repurchased or redeemed 4.1 million shares for $1.12 billion. The company’s remaining share repurchase authority on Feb. 28, 2023, was ~$4.2 billion.
  • Workforce Reduction: ACN disclosed in a filing that during Q2, it initiated actions to streamline its operations. Over the next 18 months, the company expects these actions to result in the departure of approximately 19,000 people or 2.5% of its current workforce. 
  • ACN expects over half of these departures will consist of people in its non-billable corporate functions.
  • 3Q23 Outlook: Accenture expects revenues of $16.1 billion - $16.7 billion, vs. consensus of $16.64 billion.
  • FY23 Outlook: Accenture now expects revenue growth of 8% - 10% in local currency, compared to 8% - 11% previously.
  • It sees GAAP operating margin of 14.1% - 14.3%, compared to the prior 15.3% - 15.5%, and an adjusted operating margin of 15.3% - 15.5%, an expansion of 10 to 30 basis points from FY22.
  • The company now expects GAAP EPS of $10.84 - $11.06, compared to the prior $11.20 - $11.52, and adjusted EPS of $11.41 - $11.63 (vs. consensus of $11.45), an increase of 7% - 9% from FY22.
  • Price Action: ACN shares traded higher by 4.23% at $263.98 during the market session on the last check Thursday.
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