Accenture Gains After Quarterly Profit Beats Estimates
Accenture Plc (ACN), the world’s second- largest technology-consulting company, rose the most in 18 months after reporting quarterly earnings that topped analysts’ estimates, as corporations seek savings through outsourcing and advice.
Accenture advanced 6.1 percent to $60.09 at the close in New York, for the biggest one-day increase since December 2010. The Dublin-incorporated company’s shares have risen 13 percent this year.
Accenture, which trails only International Business Machines Corp. (IBM) in technology-consulting sales, is expanding in growth markets outside the U.S. and says American companies emerged from the financial crisis stronger and more streamlined. Client cost-cutting efforts are driving outsourcing growth in Europe.
In Europe “what we’ve seen is some moderation of our growth in consulting, but as you’ve noted, very strong and positive growth in the outsourcing,” Chief Executive Officer Pierre Nanterme said yesterday on a conference call. “We continue to remain positive with the situation in Europe.”
Net income for the fiscal third quarter rose 9.7 percent to $689.2 million, or $1.03 a share, from $628 million, or 93 cents, a year earlier, according to a statement released yesterday after the markets closed. Analysts had estimated earnings excluding some items of 99 cents a share, according to data compiled by Bloomberg.
“In a weakening economic environment, clients look to outsourcing to lower costs and create variable cost structures and cut discretionary spending on traditional consulting/systems integration,” David Grossman, an analyst at Stifel Nicolaus & Co., said in a client note. “Global diversified players like ACN and IBM Services typically fare better on a relative basis in these environments than the large offshore players.” He recommends buying the shares.
Net sales for the quarter ended May 31 rose 6.5 percent to $7.15 billion. Analysts had estimated $7.17 billion on average.
The company yesterday also lowered its full-year forecast to a narrower range, citing foreign currency changes.
Earnings for the year ending in August are expected to be $3.80 to $3.84 a share, the company said today in a statement. In March Accenture had forecast $3.82 to $3.90. Analysts projected $3.84, the average of estimates compiled by Bloomberg. The company reiterated its March forecast that full-year revenue will increase 10 percent to 12 percent in local currency.
(Visit www.accenture.com to listen to Accenture executives’ earnings discussion from yesterday.)
To contact the editor responsible for this story: Nick Turner at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.