) reported fourth-quarter fiscal 2013 earnings per share of
$1.01, marginally beating the Zacks Consensus Estimate of $1.00.
Earnings increased 14.8% from the year-ago quarter attributable
to higher revenues, operating income, lower share count and
favorable tax rate, partially offset by lower non-operating
Revenues and Bookings
Accenture's net revenues for the quarter not only increased
3.7% from the year-ago quarter to $7.09 billion, but also came
ahead of the Zacks Consensus Estimate of $6.89 billion.
Net revenue also beat management's guided range of $6.70
billion to $7.00 billion, primarily aided by higher-than-expected
consulting revenues (up 2.0% on a year-over-year basis to $3.8
billion). Moreover, Accenture's Outsourcing revenues also
increased 6.0% from the year-ago quarter to $3.3 billion.
Among the operating segments, Health & Public Services
revenues increased 12.0% from the year-ago quarter to $1.18
billion while revenues from Financial Services were up 3.0% from
the year-ago quarter to $1.52 billion.
Accenture's revenues from Products of $1.70 billion increased
6.0% while revenues from Resources were down 1.0% from the
year-ago quarter to $1.29 billion. Communications, Media &
Technology revenues remained flat on a year-over-year basis at
Geographically, revenues from the Americas, and Europe, the
Middle East and Africa (EMEA) increased 8.0% and 2.0%,
respectively, on a year-over-year basis, while revenues from the
Asia Pacific region recorded a decline of 7.0% from the year-ago
Accenture reported new bookings of $8.4 billion during the
quarter. Consulting bookings and Outsourcing bookings for the
quarter were $3.8 billion and $4.6 billion, respectively. During
the quarter, bookings related to Consulting translated into
revenues at a faster pace than management's expectations which
helped the top line.
Fourth-quarter gross margins increased 26 basis points (bps)
from the year-ago quarter to 33.2%, primarily due to higher
Operating expenses increased 4.4% from the year-ago quarter
due to a 6.4% increase in sales and marketing expenses, 11.8%
increase in reorganization costs and 0.8% increase in general and
administrative costs. Reorganization costs remained negligible on
a per share basis. As a percentage of net revenue, operating
expenses expanded 14 bps to 19.3% from the year-ago quarter.
Accenture's operating expenses increased 4.6% from the
year-ago quarter to $983.5 million while margins expanded 10 bps
to 13.9%. Accenture reported net income of $727.3 million up from
Balance Sheet & Cash Flow
Accenture exited the quarter with total cash balance of $5.63
billion versus $5.94 billion in the preceding quarter.
Accenture's long-term debt balance at the end of the fourth
quarter was $25.6 million.
Operating cash flow was $1.27 billion in the reported quarter
compared with $1.50 billion in the prior quarter while free cash
flow for the quarter was $1.2 billion.
Share Repurchase and Dividend
Consistent with Accenture's policy of returning cash to its
shareholders, the company repurchased 14.5 million of its common
outstanding shares for a total value of $1.10 billion during the
fourth quarter. The activity includes 13.3 million shares
repurchased in the open market. Management also approved an
additional $5.0 billion share repurchase which increased
Accenture's total share outstanding authority to $7.0
Accenture also declared semi-annual dividend of 93 cents per
share (an increase of 15.0%) payable on Nov 15, 2013.
For the first quarter of 2014, Accenture expects net revenues
of between $7.0 billion and $7.3 billion. The company did not
provide any update on fourth-quarter earnings per share.
The company also provided guidance for fiscal 2014. Accenture
expects net revenue to grow in the range of 2.0% to 6.0% in local
currency. The company expects earnings in the range of $4.42 to
$4.54 per share. The company expects new bookings in the range of
$32 billion-$35 billion.
During fiscal 2014, the company expects its operating margins
to expand in the range of 10 basis points (bps) to 30
bps from the previous year. In fiscal 2014, the company
expects operating cash flow in the range of $3.6 billion-$3.9
billion; property and equipment additions are expected to be $400
million; and free cash flow in the range of $3.2 billion-$3.5
Accenture's fourth-quarter results reflect its increasing
focus on the outsourcing business, operating cost optimization,
new bookings and continuous return of shareholders' value.
Moreover, its consulting business is also showing signs of
Improved bookings growth and solid performance across
insurance, banking and healthcare segments reflects strong demand
for Accenture's services, boosting long-term growth prospects.
The recent acquisitions in the banking space are also expected to
strengthen its capabilities. The company's associations with
) and Telenor for providing IT services are expected to benefit,
However, increasing competition from
Cognizant Technology Solutions
International Business Machines
), a strained spending environment and Accenture's broad European
exposure may temper its growth prospects to some extent.
Currently, Accenture has a Zacks Rank #3 (Hold).
ACCENTURE PLC (ACN): Free Stock Analysis
COGNIZANT TECH (CTSH): Free Stock Analysis
INTL BUS MACH (IBM): Free Stock Analysis
VODAFONE GP PLC (VOD): Free Stock Analysis
To read this article on Zacks.com click here.