Accenture beats profit estimates, cautious on FY revenue

Accenture Plc beat analysts' second-quarter profit estimates on strength in its outsourcing business, but said full-year revenue growth would be below the mid point of its previously forecast range of 5 to 8 percent.

Outsourcing revenue rose 9 percent to $3.3 billion in the quarter, while consulting revenue fell by about 1 percent to $3.8 billion.

Accenture's shares fell about 2 percent in premarket trading, after closing at $74.88 on the New York Stock Exchange on Wednesday.

The company's stock has risen 5.5 percent since it reported results in December. During the same period, the S&P 500 IT Services (Industry) index <.SPLRCITCS> gained 9 percent.

 

The company kept unchanged its forecast for earnings of $4.24 to $4.32 per share for the year ending August 31.

Analysts on average were expecting full-year earnings of $4.26 per share on revenue of $29.3 billion, according to Thomson Reuters I/B/E/S. Growth of 5 to 8 percent implies revenue of between $31.66 billion and $32.16 billion.

While an industrywide rebound in discretionary spending is expected only in the second half of the year, rivals such as Cognizant Technology Solutions Corp and Infosys Ltd reported growth in consulting revenue for the quarter ended December 31.

In December, Accenture forecast a second quarter below investor expectations, saying clients continued to defer discretionary spending in Europe.

Second-quarter net income rose to $1.19 billion, or $1.65 per share, from $714.2 million, or 97 cents per share, a year earlier.

Excluding one-time items, it earned $1.00 per share.

Second-quarter revenue rose 4 percent to $7.06 billion.

Analysts on average had expected earnings of 97 cents per share on revenue of $7.07 billion.