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Accenture Reports Fourth-Quarter And Full-Year Fiscal 2012 Results, With Record Annual Revenues, EPS, Operating Margin, Free Cash Flow And New Bookings

Stocks in this article: ACN

Forward-Looking Statements

Except for the historical information and discussions contained herein, statements in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. These include, without limitation, risks that: the company’s results of operations could be adversely affected by volatile, negative or uncertain economic conditions and the effects of these conditions on the company’s clients’ businesses and levels of business activity; the company’s business depends on generating and maintaining ongoing, profitable client demand for the company’s services and solutions, and a significant reduction in such demand could materially affect the company’s results of operations; if the company is unable to keep its supply of skills and resources in balance with client demand around the world and attract and retain professionals with strong leadership skills, the company’s business, the utilization rate of the company’s professionals and the company’s results of operations may be materially adversely affected; the consulting and outsourcing markets are highly competitive, and the company might not be able to compete effectively; the company’s results of operations (including its net revenues and operating income) and the value of balance-sheet items originally denominated in other currencies could be materially adversely affected by unfavorable fluctuations in foreign currency exchange rates or changes to existing currencies; the company could have liability or the company’s reputation could be damaged if the company fails to protect client and company data or information systems as obligated by law or contract or if the company’s information systems are breached; the company’s Global Delivery Network is increasingly concentrated in India and the Philippines, which may expose it to operational risks; as a result of the company’s geographically diverse operations and its growth strategy to continue geographic expansion, the company is more susceptible to certain risks; the company’s results of operations could materially suffer if the company is not able to obtain sufficient pricing to enable it to meet its profitability expectations; if the company’s pricing estimates do not accurately anticipate the cost, risk and complexity of the company performing its work or third parties upon which it relies do not meet their commitments, then the company’s contracts could have delivery inefficiencies and be unprofitable; the company’s work with government clients exposes the company to additional risks inherent in the government contracting environment, including risks related to governmental budget and debt constraints; the company’s business could be materially adversely affected if it incurs legal liability in connection with providing its services and solutions; the company’s results of operations and ability to grow could be materially negatively affected if the company cannot adapt and expand its services and solutions in response to ongoing changes in technology and offerings by new entrants; outsourcing services subject the company to different operational risks than its consulting and systems integration services; the company’s services or solutions could infringe upon the intellectual property rights of others or the company might lose its ability to utilize the intellectual property of others; the company has only a limited ability to protect its intellectual property rights, which are important to the company’s success; the company’s ability to attract and retain business and employees may depend on its reputation in the marketplace; the company’s alliance relationships may not be successful or may change, which could adversely affect the company’s results of operations; the company might not successfully manage the operational and other risks associated with acquiring or integrating businesses or entering into joint ventures; the company’s profitability could suffer if its cost-management strategies are unsuccessful, and the company may not be able to improve its profitability through improvements to cost-management to the degree it has done in the past; many of the company’s contracts include performance payments that link some of its fees to the attainment of performance or business targets and/or require the company to meet specific service levels, which could increase the variability of the company’s revenues and impact its margins; changes in the company’s level of taxes, and audits, investigations and tax proceedings, or changes in the company’s treatment as an Irish company, could have a material adverse effect on the company’s results of operations and financial condition; if the company is unable to manage the organizational challenges associated with its size, the company might be unable to achieve its business objectives; if the company is unable to collect its receivables or unbilled services, the company’s results of operations, financial condition and cash flows could be adversely affected; the company’s share price and results of operations could fluctuate and be difficult to predict; the company’s results of operations and share price could be adversely affected if it is unable to maintain effective internal controls; the company may be subject to criticism and negative publicity related to its incorporation in Ireland; as well as the risks, uncertainties and other factors discussed under the “Risk Factors” heading in Accenture plc’s most recent annual report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission. Statements in this news release speak only as of the date they were made, and Accenture undertakes no duty to update any forward-looking statements made in this news release or to conform such statements to actual results or changes in Accenture’s expectations.

                               
ACCENTURE PLC
 
CONSOLIDATED INCOME STATEMENTS
 
(In thousands of U.S. dollars, except share and per share amounts)
(Unaudited)
 
Three Months Ended August 31, Year Ended August 31,
2012 % of Net Revenues 2011 % of Net Revenues 2012 % of Net Revenues 2011 % of Net Revenues
REVENUES:
Revenues before reimbursements ("Net revenues") $ 6,835,893 100 % $ 6,687,650 100 % $ 27,862,330 100 % $ 25,507,036 100 %
Reimbursements   452,366     486,423     1,915,655     1,845,878  
Revenues 7,288,259 7,174,073 29,777,985 27,352,914
 
OPERATING EXPENSES:
Cost of services:
Cost of services before reimbursable expenses 4,587,003 67.1 % 4,472,263 66.9 % 18,874,629 67.7 % 17,120,317 67.1 %
Reimbursable expenses   452,366     486,423     1,915,655     1,845,878  
Cost of services 5,039,369 4,958,686 20,790,284 18,966,195
Sales and marketing 839,187 12.3 % 820,841 12.3 % 3,303,478 11.9 % 3,094,465 12.1 %
General and administrative costs 468,920 6.9 % 471,610 7.1 % 1,810,984 6.5 % 1,820,277 7.1 %
Reorganization costs, net   433     407     1,691     1,520  
Total operating expenses   6,347,909     6,251,544     25,906,437     23,882,457  
 
OPERATING INCOME 940,350 13.8 % 922,529 13.8 % 3,871,548 13.9 % 3,470,457 13.6 %
 
Loss on investments, net (889 ) (145 ) (858 ) (1,086 )
Interest income 11,488 11,936 42,550 41,083
Interest expense (3,186 ) (3,930 ) (15,061 ) (15,000 )
Other (expense) income, net   (1,609 )   5,008     5,995     16,568  
 
INCOME BEFORE INCOME TAXES 946,154 13.8 % 935,398 14.0 % 3,904,174 14.0 % 3,512,022 13.8 %
 
Provision for income taxes   309,999     252,533     1,079,241     958,782  
 
NET INCOME 636,155 9.3 % 682,865 10.2 % 2,824,933 10.1 % 2,553,240 10.0 %
 

Net income attributable to noncontrolling interests in Accenture SCA and Accenture Canada Holdings Inc.

 

(51,773 ) (60,299 ) (237,520 ) (243,575 )

Net income attributable to noncontrolling interests – other (1)

  (6,100 )   (10,633 )   (33,903 )   (31,988 )
 
NET INCOME ATTRIBUTABLE TO ACCENTURE PLC $ 578,282   8.5 % $ 611,933   9.2 % $ 2,553,510   9.2 % $ 2,277,677   8.9 %
 
CALCULATION OF EARNINGS PER SHARE:
Net income attributable to Accenture plc $ 578,282 $ 611,933 $ 2,553,510 $ 2,277,677
Net income attributable to noncontrolling interests

in Accenture SCA and Accenture Canada Holdings Inc. (2)

  51,773     60,299     237,520     243,575  
Net income for diluted earnings per share calculation $ 630,055   $ 672,232   $ 2,791,030   $ 2,521,252  
 
EARNINGS PER SHARE:
- Basic $ 0.91 $ 0.95 $ 3.97 $ 3.53
- Diluted (3) $ 0.88 $ 0.91 $ 3.84 $ 3.39
 
WEIGHTED AVERAGE SHARES:
- Basic 636,064,228 647,428,247 643,132,601 645,631,170
- Diluted (3) 717,827,179 739,050,449 726,416,452 742,823,519
 
Cash dividends per share $ - $ - $ 1.35 $ 0.90

___________

(1)

 

Comprised primarily of noncontrolling interest attributable to the noncontrolling shareholders of Avanade, Inc.

(2)

Diluted earnings per share assumes the redemption of all Accenture SCA Class I common shares owned by holders of noncontrolling interests and the exchange of all Accenture

Canada Holdings Inc. exchangeable shares for Accenture plc Class A ordinary shares on a one-for-one basis.

(3)

Diluted weighted average Accenture plc Class A ordinary shares and earnings per share amounts in fiscal 2011 have been restated to reflect additional restricted share units

issued to holders of restricted share units in connection with the fiscal 2012 payment of cash dividends. This restatement resulted in a one cent decrease in diluted earnings per

share from $3.40 to $3.39 for the year ended August 31, 2011.

 
 

ACCENTURE PLC

 

SUMMARY OF REVENUES

               
(In thousands of U.S. dollars)
(Unaudited)
 
Percent Percent
Increase Increase
Three Months Ended August 31, (Decrease) Local
2012 2011 U.S. dollars Currency
OPERATING GROUPS
Communications, Media & Technology (1) $ 1,384,757 $ 1,431,911 (3 %) 4 %
Financial Services 1,479,845 1,372,310 8 16
Health & Public Service 1,057,097 993,657 6 10
Products 1,607,002 1,586,462 1 8
Resources 1,303,087 1,298,799 - 7
Other   4,105   4,511 n/m n/m
TOTAL Net Revenues 6,835,893 6,687,650 2 % 9 %
Reimbursements   452,366   486,423 (7 )
TOTAL REVENUES $ 7,288,259 $ 7,174,073 2 %
 
GEOGRAPHY
Americas $ 3,193,198 $ 3,041,001 5 % 8 %
EMEA 2,582,960 2,689,793 (4 ) 8
Asia Pacific   1,059,735   956,856 11 14
TOTAL Net Revenues $ 6,835,893 $ 6,687,650 2 % 9 %
 
TYPE OF WORK
Consulting $ 3,738,245 $ 3,881,006 (4 %) 2 %
Outsourcing   3,097,648   2,806,644 10 18
TOTAL Net Revenues $ 6,835,893 $ 6,687,650 2 % 9 %
 
 
Percent
Percent Increase
Year Ended August 31, Increase Local
OPERATING GROUPS 2012 2011 U.S. dollars Currency
Communications, Media & Technology (1) $ 5,906,724 $ 5,434,024 9 % 11 %
Financial Services 5,842,776 5,380,674 9 11
Health & Public Service 4,255,631 3,861,146 10 11
Products 6,562,974 5,931,333 11 13
Resources 5,275,001 4,882,248 8 10
Other   19,224   17,611 n/m n/m
TOTAL Net Revenues 27,862,330 25,507,036 9 % 11 %
Reimbursements   1,915,655   1,845,878 4
TOTAL REVENUES $ 29,777,985 $ 27,352,914 9 %
 
GEOGRAPHY
Americas $ 12,522,673 $ 11,270,668 11 % 13 %
EMEA 11,296,207 10,853,684 4 8
Asia Pacific   4,043,450   3,382,684 20 18
TOTAL Net Revenues $ 27,862,330 $ 25,507,036 9 % 11 %
 
TYPE OF WORK
Consulting $ 15,562,321 $ 14,924,187 4 % 6 %
Outsourcing   12,300,009   10,582,849 16 19
TOTAL Net Revenues $ 27,862,330 $ 25,507,036 9 % 11 %

__________

n/m = not meaningful

 

(1)

On September 1, 2011, the Company renamed the Communications & High Tech operating group to Communications, Media & Technology.

No amounts have been reclassified in any period in connection with this name change.

 
                   
ACCENTURE PLC
 
OPERATING INCOME BY OPERATING GROUP (OG)
 
(In thousands of U.S. dollars)
(Unaudited)
 
Three Months Ended August 31,
2012 2011
OPERATING GROUPS Operating

Income

Operating

Margin

Operating

Income

Operating

Margin

Increase

(Decrease)

Communications, Media & Technology (1) $ 180,930 13 % $ 188,444 13 % $ (7,514 )
Financial Services 235,613 16 187,312 14 48,301
Health & Public Service 48,032 5 100,715 10 (52,683 )
Products 219,270 14 206,169 13 13,101
Resources   256,505 20   239,889 18   16,616  
Total $ 940,350 13.8 % $ 922,529 13.8 % $ 17,821  
 
 
 
Year Ended August 31,
2012 2011
OPERATING GROUPS Operating

Income

  Operating

Margin

  Operating

Income

  Operating

Margin

  Increase (Decrease)
Communications, Media & Technology (1) $ 845,411 14 % $ 727,761 13 % $ 117,650
Financial Services 809,633 14 898,287 17 (88,654 )
Health & Public Service 376,125 9 318,430 8 57,695
Products 863,860 13 679,716 11 184,144
Resources   976,519 19   846,263 17   130,256  
Total $ 3,871,548 13.9 % $ 3,470,457 13.6 % $ 401,091  
 

(1)

 

On September 1, 2011, the Company renamed the Communications & High Tech operating group to Communications, Media & Technology.

No amounts have been reclassified in any period in connection with this name change.

 
       
ACCENTURE PLC
 
CONSOLIDATED BALANCE SHEETS
 
(In thousands of U.S. dollars)
 
August 31, 2012 August 31, 2011
(Unaudited)
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 6,640,526 $ 5,701,078
Short-term investments 2,261 4,929
Receivables from clients, net 3,080,877 3,236,059
Unbilled services, net 1,399,834 1,385,733
Other current assets   1,464,433   1,143,384
 
Total current assets   12,587,931   11,471,183
 
NON-CURRENT ASSETS:
Unbilled services, net 12,151 49,192
Investments 28,180 40,365
Property and equipment, net 779,494 785,231
Other non-current assets   3,257,659   3,385,539
 
Total non-current assets   4,077,484   4,260,327
 
TOTAL ASSETS $ 16,665,415 $ 15,731,510
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Current portion of long-term debt and bank borrowings $ 11 $ 4,419
Accounts payable 903,847 949,250
Deferred revenues 2,275,052 2,219,270
Accrued payroll and related benefits 3,428,838 3,259,252
Other accrued liabilities   1,501,457   1,474,398
 
Total current liabilities   8,109,205   7,906,589
 
NON-CURRENT LIABILITIES:
Long-term debt 22 -
Other non-current liabilities   3,931,760   3,474,049
 
Total non-current liabilities   3,931,782   3,474,049
 
TOTAL ACCENTURE PLC SHAREHOLDERS' EQUITY 4,145,833 3,878,951
 
NONCONTROLLING INTERESTS   478,595   471,921
 
TOTAL SHAREHOLDERS' EQUITY 4,624,428 4,350,872
   
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 16,665,415 $ 15,731,510
 
               
ACCENTURE PLC
 
CONSOLIDATED CASH FLOWS STATEMENTS
 
(In thousands of U.S. dollars)
(Unaudited)
 
Three Months Ended August 31, Year Ended August 31,
2012 2011 2012 2011
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 636,155 $ 682,865 $ 2,824,933 $ 2,553,240
Depreciation, amortization and asset impairments 178,909 141,340 593,545 513,256
Share-based compensation expense 125,697 106,419 538,086 450,137
Change in assets and liabilities/other, net   767,430     450,652     300,288     (74,894 )
 
Net cash provided by operating activities   1,708,191     1,381,276     4,256,852     3,441,739  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (115,258 ) (136,975 ) (371,974 ) (403,714 )
Purchases of businesses and investments, net of cash acquired (699 ) (187,525 ) (174,383 ) (306,187 )
Other investing, net   3,342     3,370     10,972     6,514  
 
Net cash used in investing activities   (112,615 )   (321,130 )   (535,385 )   (703,387 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares 56,722 89,003 454,387 557,366
Purchases of shares (695,741 ) (730,804 ) (2,098,841 ) (2,171,877 )
Cash dividends paid - - (950,857 ) (643,642 )
Other financing, net   (3,965 )   27,266     36,456     136,649  
 
Net cash used in financing activities (642,984 ) (614,535 ) (2,558,855 ) (2,121,504 )
Effect of exchange rate changes on cash and cash equivalents   59,275     (1,217 )   (223,164 )   245,938  
 
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,011,867 444,394 939,448 862,786
 
CASH AND CASH EQUIVALENTS, beginning of period   5,628,659     5,256,684     5,701,078     4,838,292  
 
CASH AND CASH EQUIVALENTS, end of period $ 6,640,526   $ 5,701,078   $ 6,640,526   $ 5,701,078  




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