Updated from 4:57 p.m. EDT
SAN FRANCISCO -- Consulting and outsourcing giant
beat fourth-quarter revenue and profit targets, downplaying concerns about a slowing economy and the strength of its financial services clients.
Accenture reported Thursday that net income fell to $317 million, or 50 cents a share, from $346 million, or 56 cents a share a year earlier, because of a tax gain in 2006.
Adjusting for the tax gain, Accenture earned 50 cents a share, beating analysts' average estimate of 48 cents, according to Thomson Financial.
Net revenue, or revenue excluding reimbursements, rose 29% to $5.11 billion, also topping expectations. Factoring out currency exchange effects, revenue rose 23%. New bookings totaled $4.9 billion, slightly lower than a year earlier.
"We achieved double-digit revenue growth in U.S. dollars and growth in local currency across all of our operating groups and geographies, leading to our highest quarterly and annual revenues ever," said Chief Executive William D. Green in a statement.
Consulting was 60% of revenue and outsourcing was 40%. In a conference call following the financial report, Chief Financial Officer Pam Craig said she expects this ratio will be maintained in the near-term.
Although consulting contracts have higher profit margins, some investors have anticipated that Accenture's breakdown of revenue would shift toward outsourcing contracts that are longer-term in nature and less susceptible to broader economic trends.
But CEO Green said that Accenture's consulting business can endure economic headwinds because it doesn't focus on small, discretionary projects, but rather on long-term strategic issues that companies face, such as complying with regulatory mandates or rolling out information systems through globally scattered operations.
Accenture's management also countered concerns that the problems in the credit markets can leave financial services firms with constrained budgets for consulting and technology projects.
"The subprime market issues has had no impact on our business to date, although we continue to monitor the situation," said Steve Rohleder, chief operating officer, during the conference call.
Financial services firms are Accenture's second-largest client base and accounted for 22% of revenue in the quarter. The communications and high tech sector accounted for 24% of revenue.
Underscoring confidence in is future cash flow, the company boosted its annual dividend by 7 cents or 20% to 42 cents.
For the first quarter, Accenture forecast net revenue of $5.4 billion to $5.6 billion, ahead of analysts' consensus estimate. The company also forecast annual earnings of $2.21 to $2.26 per share, vs. the Street estimate of $2.22.
Accenture expects full-year net revenue to grow by 9% to 12%, to $21.5 billion to $22.1 billion, ahead of expectations.
In recent after-hours trading, shares of Accenture were up 33 cents, or 0.9%, to $38.35.