Accenture plc. (ACN)

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Accenture plc (ACN)

F3Q10 (Qtr End 05/31/10) Earnings Call Transcript

June 24, 2010 4:30 pm ET

Executives

Richard Clark – Managing Director, IR

Bill Green – Chairman and CEO

Pamela Craig – CFO

Analysts

Rod Bourgeois – Sanford Bernstein

Darrin Peller – Barclays Capital

Tien-Tsin Huang – JPMorgan

Joseph Foresi – Janney Montgomery Scott

Julio Quinteros – Goldman Sachs

Adam Frisch – Morgan Stanley

Edward Caso – Wells Fargo

Bryan Keane – Credit Suisse

Karl Keirstead – Kaufman Brothers

Moshe Katri – Cowen & Co.

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to Accenture's third quarter fiscal 2010 earnings conference. At this time all lines are in a listen only mode. Later there will be an opportunity for your questions and you may queue up at any time during the presentation by pressing star then one on your touch tone phone. If you should require assistance from an operator please press star then Zero. I would also like to remind you that today’s conference is being recorded.

I will now turn the conference over to Richard Clark, Managing Director of Investor Relations. Please go ahead, sir.

Richard Clark

Thank you, operator and thank you everyone for joining us today on our third 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, Chairman and Chief Executive Officer and 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 on what we are seeing in the market and how we are positioning ourselves for business for future growth. Pam will provide our business outlook for the fourth quarter and full fiscal year 2010. And then 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 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 general economic conditions and those factors set forth in today’s news release and discussed under the Risk Factors section of our Annual Report on Form 10K and other SEC filings.

During our call today, we will reference certain non-GAAP financial measures which we believe provide useful information for investors. We include reconciliations of those measures to GAAP in our news release or on the Investor Relations section of our website at 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.

Bill Green

Thank you, Richard, and thanks everyone for joining us today. We are very pleased with our performance in Q3 which showed positive growth, strong overall results, and building momentum in our business. Equally exciting, we see increasing demand for many of our new services and offerings across both management consulting and technology.

Here are some of the highlights from the quarter. Revenues were 5.6 billion squarely within our expected range of 5.5 to 5.7 billion. We grew operating income 10% and increased operating margin to 14.4%. We delivered earnings per share of $0.73, an increase of $0.05 over Q3 last year.

New bookings were strong at 6.4 billion with consulting and outsourcing each exceeding 3 billion. We generated more than 900 million in free cash flow and we continue to have an exceptionally strong balance sheet. Everywhere you look at it, a very good performance.

While there is still pockets of uncertainty in the global economy, we continue to see signs of positive momentum as clients are again looking to their future and focused on improved growth and business performance. We are right there, working closely with them and are helping them shape and launch their initiatives which create exciting opportunities for Accenture.

We continue to make targeted investments in new offerings and services and are aggressively recruiting high quality talent to ensure we have the breadth and depth of capabilities to serve our clients today as well as tomorrow.

I believe that as a company, we have never in our history been better positioned for growth and expansion than we are today. With that I will turn the call over to Pam who will provide some more detail on the numbers.

Pamela Craig

Thank you, Bill, and thanks for listening in today. I am pleased to tell you more about our strong third quarter results. We did our planning for fiscal year 2010 a year ago in a challenging and unpredictable environment, and as we wind down the year, we are delivering.

We are driving the business and getting the results. Our pipeline has strengthened considerably since the start of the year. We are aggressively recruiting talent, and bookings are coming through well. We have the revenues we projected, some margin expansion, exceptional cash flow, and a rock solid balance sheet. In this environment, this is an excellent result.

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