Technology outsourcing and consulting firm Accenture Ltd. (ACN) said Thursday after the markets closed that its second quarter profit rose slightly from last year even as revenue fell amid pull back in technology spending. The company's quarterly earnings per share came in above analysts' expectations but its quarterly revenue fell short of analysts' forecast. The company once again lowered its full year revenue and earnings outlook to reflect the impact of the widespread global economic downturn.
The Hamilton, Bermuda-based company reported net income for the second quarter of $411.4 million, compared to $406.6 million for the year-ago quarter.
Net income per share, which includes minority interests in Accenture SCA and Accenture Canada Holdings Inc., were $0.63 per share for the second quarter, compared to $0.64 per share in the prior year quarter.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.62 per share for the second quarter.
The company's effective tax rate for the second quarter was 28.1%, compared to 17.8% for the second quarter last year, which was unusually low in that quarter due to final determinations and research and development credits.
Income before minority interest for the second quarter fell 6% to $502 million from $534 million in the last year's comparable quarter.
Gross margin for the quarter improved to 30.8% from 29.5% a year earlier.
Operating income for the second quarter increased 6% to $677 million, or 12.9% of net revenues, from $638 million, or 11.4% of net revenues, in the second quarter of last year.
Total revenue for the second quarter fell to $5.66 billion from $6.06 billion in the same quarter last year. Net revenue, which is revenue before reimbursements, declined 6% to $5.27 billion from $5.61 billion a year ago. Second quarter net revenue grew 3% in local currency. Eighteen analysts had a consensus revenue estimate of $5.53 billion for the second quarter.
Consulting net revenues for the quarter fell 10% in U.S. dollars and 1% in local currency from a year ago to $3.03 billion, while outsourcing net revenues decreased 1% in U.S. dollars but rose 9% in local currency to $2.24 billion.
William Green, Accenture's chairman & CEO, said, We delivered a solid quarter, given an economic environment that is as challenging as any we have ever experienced. This increasingly uncertain environment is affecting business broadly and has had a dramatic impact on some of our clients.
Second quarter net revenue from Americas fell 1% to $2.30 billion and Europe, Middle East and Africa net revenue dropped 13% to $2.42 billion, while Asia Pacific revenue rose 10% to $553 million.
Among operating groups, financial services group net revenue for the quarter fell 14% to $1.04 billion, while products group net revenue declined 5% to $1.37 billion and communications & high Tech group net revenue dropped 11% to $1.19 billion.
New bookings for the second quarter were $5.98 billion, which reflects a negative 8% foreign-currency impact when compared with new bookings in the second quarter of last year. Consulting new bookings for the quarter were $3.14 billion, or 52% of total new bookings, while outsourcing new bookings were $2.84 billion, comprising 48% of total new bookings.
During the second quarter, Accenture repurchased or redeemed 11.0 million shares for a total of $357 million. At the end of the second quarter, the company had about $1.5 billion of share repurchase authority remaining.
Looking forward, the company expects third quarter net revenue in the range of $5.1 billion to $5.3 billion. Analysts currently expect the company to earn $5.77 billion for the third quarter.
For the fiscal year 2009, the company now expects net revenue growth to be in the range of 0% to 4% in local currency, compared to its prior guidance of 6% to 10% growth in local currency.
The company also lowered its fiscal year 2009 earnings guidance to a range of $2.60 to $2.67 per share from its earlier guidance of $2.78 to $2.85 per share.
Analysts currently expect the company to earn $2.79 per share on revenue of $23.06 billion for the fiscal year 2009.
Accenture, however, continues to expect operating margin for the fiscal year 2009 to be in the range of 13.4% to 13.7%, representing a year-over-year improvement of 50-80 basis points.
The company lowered its new bookings forecast for the fiscal year 2009 to a range of $23 billion to $25 billion from its previous forecast of $24 billion to $27 billion.
Accenture shares, which have traded in a range of $24.76 to $43.04 over the past year, closed Thursday's regular trading session at $31.96, up 35 cents or 1.11%.The stock is currently losing $3.01% or 9.42% in after hours trading.
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