Technology outsourcing and consultancy giant Accenture plc (ACN) on Thursdayreported a 71 percent surge in profit for the second quarter from last year, reflecting higher revenues and margins. The results also include one-time gains. Earnings per share for the quarter beat analysts' estimates, while revenues fell short of their expectations.
Looking ahead, Accenture projects revenue for the third quarter below Street expectations and fiscal 2013 revenue at the lower end of its previous forecast range. Shares of the company are down 3 percent in pre-market trades.
Separately, Accenture said Pamela Craig has decided to step down as the company's chief financial officer on July 1 and retire from the company on August 31, 2013. She will be succeeded as CFO by Senior Vice President of Finance, David Rowland, effective July 1, 2013.
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.
Pierre Nanterme, Accenture's chairman and CEO, said, "We are pleased with our second-quarter financial results, which were in line with our expectations. We saw very strong demand for our services, with $9.1 billion in new bookings, including record consulting bookings. Our revenue growth was within our guided range for the quarter, including a 10 percent local-currency increase in outsourcing."
Accenture's outsourcing net revenues for the quarter grew 9 percent to $3.31 billion, while consulting revenues declined 1 percent to $3.75 billion.
Gross margin improved to 31.6 percent from 31.1 percent in the same period last year, while operating margin improved to 16.5 percent from 13.1 percent a year ago.
Accenture's second-quarter net income was $1.10 billion or $1.65 per share, up from $643.92 million or $0.97 per share in the year-ago period. The latest quarters' results include $0.65 in benefits from final determinations of prior-year tax liabilities and a reduction in reorganization liabilities.
Stripping out these benefits, earnings per share for the latest quarter were $1.00. On average, 21 analysts polled by Thomson Reuters expected earnings per share of $0.97 for the quarter. Analysts' estimates typically exclude one-time items.
Net revenues for the quarter rose 4 percent year-over-year in both U.S. dollars and local currency to $7.06 billion from $6.80 billion in the same period last year. Analysts had a consensus revenue estimate for the quarter of $7.07 billion.
New bookings for the quarter were $9.1 billion, with record consulting bookings of $4.4 billion and outsourcing bookings of $4.7 billion.
During the second quarter, Accenture repurchased or redeemed 8.8 million shares for a total of $609 million. As at February 28, the company had about $3.6 billion remaining under its authorization.
Looking ahead to the third quarter, Accenture forecasts net revenues of $7.25 billion to $7.50 billion, assuming a foreign-exchange impact of negative 2.5 percent. Analysts currently estimate revenue of $7.60 billion.
For fiscal 2013, Accenture now forecasts earnings per share of $4.89 to $4.97, reflecting the $0.65 in benefits related to final determinations of prior-year tax liabilities and the reduction in reorganization liabilities in the second quarter. Excluding these benefits, the company continues to expect earnings per share in a range of $4.24 to $4.32.
The company now expects net revenue growth for the year in the lower half of its previously guided range of 5 percent to 8 percent in local currency.
Analysts currently expect the company to report earnings of $4.26 per share for the year on revenues of $29.29 billion.
Accenture declared a semi-annual cash dividend of $0.81 per share on its Class A ordinary shares for shareholders of record at the close of business on April 12, 2013.
Accenture SCA will declare a semi-annual cash dividend of $0.81 per share on Accenture SCA Class I common shares for shareholders of record at the close of business on April 9, 2013. These dividends are both payable on May 15, 2013.
Separately, Accenture said that David Rowland would succeed Pamela Craig as CFO. Pamela steps down after a 34-year career with the company.
Rowland, aged 52, is currently senior vice president - finance, with global responsibility for Accenture's Finance Operations, which includes approximately 3,500 finance professionals focused on client finance, country controllership and operating group and growth platform finance activities.
Rowland is a member of Accenture's Global Management Committee and serves on the board of directors for Avanade, a joint venture of Accenture and Microsoft. He began his career with Accenture in 1983.
ACN closed Wednesday's trading at $74.88. In Thursday's pre-market, the stock is down $2.28 or 3.04 percent to $72.60.
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