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Accenture PLC (ACN)

F1Q2011 Earnings Call Transcript

December 16, 2010 4:30 pm ET


K.C. McClure – Managing Director, IR

William Green – Chairman and CEO

Pamela Craig – CFO

Pierre Nanterme – CEO Designate


Rod Bourgeois – Bernstein

Nathan Rozof – Morgan Stanley

Julio Quinteros – Goldman Sachs

Jason Kupferberg – UBS

Darrin Peller – Barclays Capital

Tien-Tsin Huang – JPMorgan

Edward Caso – Wells Fargo Securities

Bryan Keane – Credit Suisse

Moshe Katri – Cowen



Ladies and gentlemen, thank you for standing by, and welcome to Accenture's first quarter fiscal 2011 earnings call. At this time, all lines are in a listen-only mode. Later, there will be an opportunity for your questions. I would also like to remind you that today’s conference is being recorded.

I’ll now turn the conference over to K.C. McClure, Managing Director of Investor Relations. Please go ahead.

K.C. McClure

Thank you, Cathy, and thanks everyone for joining us today on our first quarter fiscal 2011 earnings announcement.

As Cathy just mentioned, I'm K.C. McClure, Managing Director of Investor Relations. With me this afternoon, are Bill Green, our Chairman and Chief Executive Officer; and Pamela Craig, our Chief Financial Officer, and Pierre Nanterme, who will become our Chief Executive Officer on January 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. 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 for the first quarter. Bill will then provide a brief update on our growth strategy and market positioning. Pam will then provide our business outlook for the second quarter and full fiscal year 2011, and then we will take your questions.

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 in 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 discussed 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. We include reconciliations of those measures where appropriate to GAAP in our news release or on the Investor Relations section of our website at,

As always, Accenture assumes no obligation to update the information presented on this conference call.

Now, let me turn the call over to Bill.

William Green

Thank you, K.C. and thanks everyone for joining us today. Well, the momentum continues and it's building. I am incredibly pleased with our performance in the first quarter. We achieved very strong growth at both the top and bottom line, building even further on our performance from the second half of fiscal 2010.

Here is some highlights from the quarter; revenues were more than $6 billion. This is our second highest quarterly revenues ever and exceeded the upper end of our guided range. Of particular significance, four out of our five operating groups achieved double-digit revenue growth in both U.S. dollars and local currency.

We delivered earnings per share of $0.81, an increase of $0.14 or 20% over Q1 of last year. Operating income was $827 million, also our second highest ever, with strong operating margin of 13.7%. We generated solid new bookings of $6.3 billion, including outstanding consulting bookings of more than $3.7 billion, and we continue to have a very strong balance sheet with the cash balance of $4.2 billion and of course, no debt. Our exceptionally strong results in the first quarter positioned us very well for the remainder of 2011, and frankly, the future.

With that, let me turn the call over to Pam, who will provide some more detail on the numbers.

Pamela Craig

Thank you, Bill. Best wishes for this season and thank you all for joining us today. I am pleased to tell you more about Accenture's fiscal year 2011 first quarter financial results.

We recorded overall outstanding revenue growth across the dimensions of our business in both consulting and outsourcing around the world and in the broad base of clients and industries we serve.

In addition, we continue to drive the business delivering net revenue growth well into the double digits in four of our five operating groups. We’ve posted up a strong first quarter towards the full year financial outlook we provided last quarter.

Unless I state otherwise all figures are GAAP except the items that are not part of the financial statements or that are calculations.

New bookings for the quarter were $6.31 billion and reflected a negative 1% foreign exchange impact compared with new bookings in the first quarter last year.

Consulting bookings were $3.72 billion. Outsourcing bookings were $2.59 billion. Consulting bookings were the highest in 10 quarters and reflected broad-based year-over-year growth.

In management consulting, clients are hiring us to help them drive both operational excellence and growth in their businesses. Bookings were very strong in Europe and Asia Pacific. We continued to see robust demand from clients for our offerings in supply chain optimization, customer service effectiveness, and sales and marketing transformation.

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