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Accenture's Profit Falls

But company beats earnings estimates.
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shares took a dive in after-hours trading after the company reported a diminished second-quarter profit.

Shares of the information technology firm plummeted $2.65, or 8.6%, to $28.25.

The company reported a net income of $69.7 million for the quarter, or 11 cents a share, a huge drop from the $209.8 million, or 35 cents a share, it made in the second quarter of 2005. The latest quarter's earnings included a pretax provision for future losses of $450 million related to the company's eventual deployment of systems for the National Health Service in England.

Excluding the impact of the NHS deal, the company made 38 cents a share, which exceeded Thomson First Call estimates of 35 cents a share.

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Net revenue for the quarter tallied $4.1 billion, up from $3.81 billion in the year-ago quarter and roughly in line with First Call estimates of $4.14 billion.

"We are very disappointed that recent developments prevented us from meeting expectations this quarter," Accenture CEO William Green said in a statement. "During the quarter, several issues increased the risks and uncertainties associated with the NHS contracts and affected our estimates of the expected contract revenues and costs. Under GAAP, we were required to record this provision to reflect these new circumstances."

For the third quarter, Accenture expects net revenue in the range of $4.3 billion to $4.5 billion and earnings between 45 cents and 47 cents a share. Analysts were expecting that Accenture would make 46 cents a share on $4.46 billion in revenue.

For the full fiscal year, Accenture estimates it will earn $1.25 to $1.30 a share, including the 27-cent-a-share impact from the NHS deal in the second quarter.

First Call estimates the company will earn $1.56 a share before items for the full year.

Shares of Accenture closed the regular session of trading up 8 cents to $30.90.