Accenture Quarter Beats Revenue Expectations, Forecast Raised
NEW YORK, Dec 16 (Reuters) - Technology outsourcing and consulting firm Accenture Plc (NYSE:ACN) reported higher-than-expected quarterly revenue and earnings, and raised its full-year outlook as more customers sought its help to run their businesses more efficiently.
Accenture, which helps companies cut costs and improve operations through consulting, outsourcing and technology services, said conditions looked good for the rest of fiscal 2011, which ends in August. The company's shares rose 2.3 percent after hours.
"Momentum is building, and is continuing," Chief Executive William Green told analysts on a conference call, adding that he was encouraged by strong bookings, an indication of future revenue growth.
Revenue for its fiscal first quarter, ended Nov. 30, rose 12 percent to $6 billion from $5.4 billion a year earlier, the company said. Wall Street analysts on average expected $5.8 billion in revenue, according to Thomson Reuters I/B/E/S.
Its quarterly profit rose to $606 million, or 81 cents a share, from $525 million, or 67 cents a share, a year earlier. That exceeded the market's average forecast of 75 cents per share.
Green said corporate clients who had cut back on spending during the recession were starting to accelerate investments, to position themselves for an economic recovery and to keep up with new technology like cloud computing.
"There's less hesitation than there was," he said. "And there's a lot of things companies need to do."
While many clients were still opting for shorter-term contracts instead of multiyear investments, he said, the size of deals were modestly increasing as general business sentiment improved.
He also said Accenture did not see the sharp drop in public spending that hit network equipment maker Cisco Systems Inc (NASDAQ:CSCO) last quarter.
Accenture's quarterly bookings totaled $6.3 billion, stronger than some analysts expected.
"Overall, it seems to be better than I thought it was going to be," said Jefferies analyst Joseph Vafi. "The stronger growth kind of more justifies the valuation."
As of Thursday's close, the shares had traded at around 15 times expected earnings, compared to IBM's 13.
For the full fiscal year, the company raised its outlook for earnings per share to a range of $3.08 to $3.16 from a previous range of $3 to $3.08.
It forecast second-quarter revenue of $5.6 billion to $5.8 billion, the midpoint of which exceeds the market's average forecast for $5.6 billion.
Accenture shares rose to $47.75 in extended trading after closing at $46.67 on the New York Stock Exchange. They have risen around 16 percent in the past three months.
"I would expect the company to continue to gain market share and grow above industry growth rates," said Daniel Flax, analyst at T. Rowe Price, one of Accenture's top institutional investors.
"This is a company with double-digit top line growth and high-teens EPS growth, and the company's got a strong management team and track record of returning capital to shareholders, both in terms of buybacks and continuing to increase the dividend." (Reporting by Ritsuko Ando; Editing by Robert MacMillan, Richard Chang and Steve Orlofsky)