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Q3 2013 Earnings Call
June 27, 2013 4:30 pm ET
Pierre Nanterme - Chairman of the Board and Chief Executive Officer
Pamela J. Craig - Chief Financial Officer
David P. Rowland - Senior Vice President of Finance
Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division
Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division
Bryan Keane - Deutsche Bank AG, Research Division
Julio C. Quinteros - Goldman Sachs Group Inc., Research Division
Jason Kupferberg - Jefferies & Company, Inc., Research Division
Keith F. Bachman - BMO Capital Markets U.S.
Sara Gubins - BofA Merrill Lynch, Research Division
Edward S. Caso - Wells Fargo Securities, LLC, Research Division
Steven Milunovich - UBS Investment Bank, Research Division
Kathryn L. Huberty - Morgan Stanley, Research Division
Previous Statements by ACN
» Accenture Management Discusses Q2 2013 Results - Earnings Call Transcript
» Accenture Management Discusses Q1 2013 Results - Earnings Call Transcript
» Accenture Management Discusses Q4 2012 Results - Earnings Call Transcript
Thank you, Joshua, and thanks, everyone, for joining us today on our third quarter fiscal 2013 earnings announcement. As Joshua just mentioned, I'm KC McClure, Managing Director of Investor Relations.
With me today are Pierre Nanterme, our Chairman and Chief Executive Officer; and Pamela Craig, our Chief Financial Officer. David Rowland is also joining us today. As you know, David is currently our Senior Vice President of Finance and will succeed Pam as our Chief Financial Officer on July 1.
We hope you've had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today's call. Pierre 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 for the third quarter. Pierre will then provide a brief update on our market positioning. David will then provide our business outlook for the fourth quarter and full fiscal year 2013 and then we will take your questions before Pierre provides a wrap up at the end of the call.
As a reminder, when we discuss revenues during today's call, we're talking about revenues before reimbursements or net revenues.
Some of the matters we'll discuss on this call are forward-looking, including the business outlook. 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 and that such statements are not a guarantee of our future performance.
Such risks and uncertainties include, but are not limited to, 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 10-K and quarterly reports on Form 10-Q 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, where appropriate, to GAAP in our news release or in 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 Pierre.
Thank you, KC, and thanks, everyone, for joining us today. Overall, our third quarter results were solid. Although, revenues came in below our expectations driven by consulting. We, again, delivered solid bookings, very good profitability and we generated very strong free cash flow.
Here is some detail on the quarter. Revenues were $7.2 billion, up 3% in local currency. While outsourcing growth was 7%, consulting growth was flat, resulting in total revenues slightly below our guided range. We delivered solid new bookings of $8.3 billion, bringing us to nearly $25 billion for the first 3 quarters of the year. Earnings per share were $1.21, including a benefit of $0.07 from a reduction in reorganization liabilities. Excluding this benefit, earnings per share were $1.14, an increase of 11%. Excluding the reorganization benefit, we delivered record operating income and operating margin, with operating margin expansion of approximately 40 basis points.
We generated $1.4 billion in free cash flow and continue to have a very strong balance sheet, ending the quarter with a cash balance of $5.9 billion. And we returned approximately $1.2 billion in cash to shareholders through share repurchases and the payment of our semi-annual cash dividend. We have updated our business outlook for the full fiscal year and David will cover it later in the call.
Now let me hand over to Pam, who will review the numbers for Q3 in greater detail. Pam, over to you.
Pamela J. Craig
Thank you, Pierre, and thanks to all of you for listening today. As Pierre mentioned, our results in the third quarter of fiscal 2013 were solid overall. Although revenue growth of 3% was slightly below our March outlook range and we now expect this trend of slower revenue growth to continue, as we finish out our fiscal year.
Bookings continued to reflect strength in demand for future transformational services, particularly in outsourcing, and bookings were lighter overall than we expected in consulting. Our commitment to managing our business with rigor and discipline was reflected in our strong operating profitability, earnings per share and cash flow this quarter.
Now let's go through the numbers. Unless I state otherwise, all figures are U.S. GAAP, except the items that are not part of the financial statements or their calculations.