Accenture Plc (ACN: Quote) Wednesday reported a higher first-quarter profit, as the technology outsourcing and consultancy giant gained from a modest rise in revenues, along with improved margins and a lower tax rate. The company's quarterly earnings topped Street analysts estimates, while revenues fell short of expectations.
Moving forward, Accenture detailed a weak revenue guidance for the second quarter, but raised its earnings outlook for the full year 2013.
Shares of the company lost 4 percent in after-hours session on the New York Stock Exchange.
"We are pleased with our first-quarter results, in particular our ability to drive profitable growth despite the continued volatility in the global economic environment..., said CEO Pierre Nanterme.
Accenture provides consulting services to clients on management, operational and technological issues, and also offers outsourcing services. The company has spread out its operations to low-cost nations to spur growth, even as it contends with foreign currency losses.
Net revenues for the quarter edged up 2 percent year-over-year, and on a constant currency basis, revenues were up 5 percent. Outsourcing net revenues for the quarter climbed 9 percent, while Consulting revenues fell 3 percent.
Revenues from Communications, Media and Technology business slid 5 percent from last year, while Financial Services gained in the equivalent. Health & Public services rose 11 percent, and Revenue edged up 2 percent.
Americas led the revenue growth with 8 percent, followed by Asia Pacific at 7 percent. Europe, Middle East and Africa revenues continued to fare poorly, declining 6 percent.
Accenture reported total first-quarter net revenues of $7.22 billion, up from $7.07 billion last year. Analysts on consensus estimated revenues of $7.32 billion.
Gross margin for the quarter improved to 32.8 percent from 31.8 percent last year, and operating margin improved to 14.5 percent from 13.9 percent a year ago.
The Dublin, Ireland-based company reported quarterly net income of $699 million or $1.06 per share, compared with $642 million or $0.96 per share last year.
Analysts expected earnings of $1.04 per share for the quarter. Analysts' estimates typically exclude special items.
During the quarter, Accenture repurchased or redeemed 3.3 million shares for $221 million. As at November 30, the company had about $4.05 billion remaining under its authorization.
For the second quarter, Accenture expects net revenues of $6.9 billion to $7.15 billion, while analysts currently estimate $7.17 billion.
For the full year 2013, Accenture now expects earnings of $4.24 to $4.32 per share, up from prior guidance of $4.22 to $4.30 per share. It continues to expect net revenue growth of 5 to 8 percent in local currency.
Analysts currently expect earnings of $4.27 per share on revenues of $29.41 billion for the full year.
ACN closed Wednesday at $70.43, down 0.97%, on a volume of 3 million shares on the NYSE. In after hours, the stock dropped $2.90 or 4.12%.
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by RTT Staff Writer
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