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Accenture Reports First-Quarter Fiscal 2014 Results

Accenture (NYSE:ACN) reported financial results for the first quarter of fiscal 2014, ended Nov. 30, 2013, with record net revenues of $7.4 billion, an increase of 2 percent in U.S. dollars and 3 percent in local currency over the same period last year. Diluted earnings per share were $1.15, an increase of $0.09, or 8 percent, over the same period last year.

Operating income was $1.09 billion, an increase of 4 percent over the same period last year, and operating margin was 14.8 percent, a year-over-year expansion of 30 basis points.

New bookings for the quarter were $8.7 billion, with consulting bookings of $4.3 billion and outsourcing bookings of $4.4 billion.

Pierre Nanterme, Accenture’s chairman and CEO, said, “First-quarter results were in line with our expectations, with revenue growth at the top of our guided range as well as strong new bookings, which position us well for the fiscal year. We were pleased with our ability to continue driving profitable growth—including an 8 percent EPS increase—in a global economic environment that remains challenging. We also returned more than $1.3 billion in cash to our shareholders through share repurchases and dividends.

“Looking ahead, we remain focused on the successful execution of our growth strategy. We continue to invest in differentiated services and evolve our operating model to capture new growth opportunities across all dimensions of our business—especially in digital and transformation. With our diverse portfolio of business and disciplined management approach, we remain confident in our ability to continue delivering value for our clients and shareholders.”

Financial Review

Revenues before reimbursements (“net revenues”) for the first quarter of fiscal 2014 were $7.36 billion, compared with $7.22 billion for the first quarter of fiscal 2013, an increase of 2 percent in U.S. dollars and 3 percent in local currency. Net revenues for the quarter reflect a foreign-exchange impact of negative 1 percent, less than the negative 2 percent we had previously assumed. Adjusting for the actual foreign-exchange impact of negative 1 percent in the quarter, the company’s guided range for quarterly net revenues would have been $7.07 billion to $7.37 billion. Accenture’s first quarter fiscal 2014 net revenues were at the top end of this adjusted range.
  • Consulting net revenues for the quarter were $3.94 billion, a decrease of 1 percent in U.S. dollars and flat in local currency compared with the first quarter of fiscal 2013.
  • Outsourcing net revenues were $3.42 billion, an increase of 5 percent in U.S. dollars and 6 percent in local currency over the first quarter of fiscal 2013.

Diluted EPS for the quarter were $1.15, compared with $1.06 for the first quarter last year. The $0.09 increase in EPS reflects:
  • $0.02 from higher revenue and operating results;
  • $0.03 from a reduction in reorganization liabilities;
  • $0.02 from a lower effective tax rate; and
  • $0.03 from a lower share count;

partially offset by:
  • $0.01 decrease from lower non-operating income.

Gross margin (gross profit as a percentage of net revenues) for the quarter was 33.3 percent, compared with 32.8 percent for the first quarter last year. Selling, general and administrative (SG&A) expenses for the quarter were $1.38 billion, or 18.7 percent of net revenues, compared with $1.32 billion, or 18.2 percent of net revenues, for the first quarter last year.

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