Accenture Ltd. (ACN)
F1Q10 Earnings Call
December 17, 2009 04:30 pm ET
Bill Green - Chairman & Chief Executive Officer
Pamela Craig - Chief Financial Officer
Richard Clark - Managing Director of Investor Relations
Rod Bourgeois - Bernstein
Moshe Katri - Cowen & Co.
Tien-Tsin Huang - JP Morgan
Darrin Peller - Barclays Capital
Jason Kupferberg - UBS
Julio Quinteros - Goldman Sachs
George Price - Stifel Nicolaus
Ed Caso - Wells Fargo Securities
Bryan Keane - Credit Suisse
Ashwin Shirvaikar - Citigroup
Previous Statements by ACN
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With that, I’d now like introduce your opening speaker for today Managing Director of Investor Relations, Richard Clark; please go ahead.
Thank you Doug and thanks to everyone for joining us today on our first quarter fiscal 2010 earnings announcement. As the operator just mentioned I’m Richard Clark, Managing Director of Investor Relations. With me this afternoon are Bill Green, our Chairman and Chief Executive Officer; Pamela Craig, our Chief Financial Officer.
We hope you have had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today’s call. Bill will begin with an overview of our results. Pam will take you through the financial details including the income statement and balance sheet along with some key operational metrics.
Bill will then provide some insights and what we are seeing in the market and how we are positioning our business. Pam will then provide our business outlook for the second quarter and full fiscal year 2010 and that we will take your questions.
As a reminder, when we discuss revenues during today’s call we are talking about revenues before reimbursements or net revenues. Some of the matters we will discuss on this call are forward-looking and you should keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.
Such risks and uncertainties include, but are not limited to, general economic conditions and those factors set forth in today’s news release and disclosed under the Risk Factors section of our Annual Report on Form 10-K and other SEC filings.
During our call today we will reference certain non-GAAP financial measures which we believe provide useful information for investors. You can find reconciliation of those measures to GAAP on the Investor Relations section of our website at www.accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call.
Now, let me turn the call over to, Bill.
Thank you Richard and thanks everybody for joining us today. We continue to drive our business with discipline this quarter, but also with an either the future. This enabled us to deliver strong profitability and solid cash flow for the quarter, well at the same time positioning us to ride the wave of economic recovery.
More than ever we remain keenly focused on our clients and their needs and on generating real value for them and for our shareholders. Here are a few highlights for the quarter. Revenues were $5.4 billion within our expected range of $5.3 to $5.5 billion. We achieved very solid operating margin of 13.9%. Earnings per share were $0.67; new bookings were $5.5 billion with particularly strong consulting bookings of $3.5 billion.
We generated free cash flow of $184 million and we continued have an exceptionally strong balance sheet with a cash balance of $4 billion after returning more than $1 billion to shareholders during in the quarter. While the economic environment remains challenging we are beginning to see signs of improvement in certain industries in markets.
Overall we feel good about our position in the market and are seeing positive momentum. We are staying very close to our clients enhancing our relationships and helping them with their most important initiatives. Our focus remains on delivering value, expanding the breath and depth of our services with current clients, attracting new clients to Accenture and leveraging our strong marketplace position.
With that, let me turn call over to Pam, who will provide some more detail on the numbers.
Thank you, Bill. Happy holidays to you all and thanks for listening today. Before we get into the numbers, let me provide some further context about how we see our business right now. While we continue to work through the economic challenges that began to affect our business in January 2009 and that are clearly evident in the revenue comparisons year-over-year for this quarter.
Our pipeline of qualified opportunities has continued to expand and it’s now at a higher level than it was before the downturn. This is most evident in our consulting bookings, the highest in the year and up over 20% since Q4. So while we are continuing to manage our business through a challenging environment, we are now taking clear steps, such as in recruiting and business development to position our business for growth.
Although this quarter was tough on a comparative basis, our revenues were within our expected range, we delivered strong operating margin and we continued our track record of cash flow generation. So let’s get into the numbers. Unless I state otherwise, all figures are U.S. GAAP, expect the items that are not part of the financial statements or that are calculations. New bookings for the quarter were $5.53 billion and reflected a positive 3% foreign exchange impact, compared with new bookings in the first quarter of last year.