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Accenture plc (ACN - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results, wherein both earnings & revenues increased year over year.
Adjusted earnings (excluding 4 cents from non-recurring items) of $2.71 per share surpassed the Zacks Consensus Estimate by 3.4% and improved 4.2% from the year-ago fiscal quarter’s reading. The bottom line benefited from higher revenues, streamlined operations and optimization of office space to reduce costs.
Revenues of $15.99 billion missed the Zacks Consensus Estimate by a slight margin but increased 3.7% from the year-ago fiscal quarter’s tally on a reported basis and 4% in terms of local currency. Revenues benefited from improved segmental results except in Communications, Media & Technology.
Based on the type of work, Consulting revenues of $8.2 billion decreased 2% from the year-ago quarter’s reading on a reported basis and local currency and missed our estimate by 1.1%. Managed Services revenues of $7.79 billion increased 10% from the year-ago quarter’s number on a reported basis and, in terms of local currency, beat our estimate by 1.4%.
Segment-wise, Communications, Media & Technology revenues of $2.71 billion missed our estimate by 9.4% and decreased 12% on a reported basis and in terms of local currency. Financial Services revenues of $3.03 billion increased 2% from the year-ago fiscal quarter’s reading on a reported basis and 5% on a local currency basis, thus lagging our estimated $3.06 billion.
Health & Public Service revenues of $3.27 billion increased 13% from the year-ago fiscal quarter’s reading both on a reported basis and local currency basis. The figure surpassed our estimates by 2.8%. Products revenues of $4.75 billion grew 6% from the year-ago fiscal quarter’s number in terms of U.S. dollars and 5% in local currency basis but missed our estimated $4.79 billion. Resources revenues of $2.23 billion increased 10% from the year-ago fiscal quarter’s level on a reported and local currency basis and surpassed our estimate by 13.8%.
Geographically, revenues of $7.55 billion from North America increased 1%, in terms of local currency, from the year-ago fiscal quarter’s figure. Revenues of $5.3 billion from Europe increased 10% on a reported basis and 7% in terms of local currency. Revenues of $3.13 billion from Growth Markets increased 1% year over year on a reported basis and 6% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $16.6 billion in the fiscal fourth quarter, down 10% from the year-ago fiscal quarter’s reading on a reported basis and in terms of local currency. Consulting bookings totaled $8.5 billion and Managed Services bookings summed $8.2 billion.
Operating Results
The gross margin (gross profit as a percentage of net revenues) for third-quarter fiscal 2023 came in at 32.4%, down 30 basis points from the figure reported in the year-ago fiscal period and up 40 basis points from our estimate. Adjusted operating income came at $2.38 billion, missing our estimated $2.41 billion. The operating margin of 14.9% expanded 20 basis points from the year-ago fiscal quarter.
Balance Sheet & Cash Flow
Accenture exited fourth-quarter fiscal 2023 with cash and cash equivalents of $9 billion compared with $8.5 billion at the end of the prior fiscal quarter. Cash provided by operating activities was $3.41 billion for the reported fiscal quarter while capital expenditure came in at $180 million. Free cash flow came in at $3.23 billion.
Guidance
For first-quarter fiscal 2024, Accenture expects revenues to be in the range of $15.85-$16.45 billion. The Zacks Consensus Estimate of $16.27 billion lies above the midpoint ($16.15 billion).
Accenture now expects fiscal 2024 adjusted earnings per share (EPS) to be in the range of $11.97-$12.32. The consensus estimate of earnings is pegged at $12.32.
Accenture expects its adjusted operating margin for the full fiscal year to be 15.5-15.7%.
Operating cash flow is anticipated in the range of $9.3-$9.9 billion. Free cash flow is expected between $8.7 billion and $9.3 billion.
Here are a few other stocks from the broader Business Services sector, which have performed well in their recent earnings releases:
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted EPS of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year.
Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.
Gartner (IT - Free Report) reported better-than-expected second-quarter 2023 results. Adjusted EPS (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% and matched the year-ago reported figure.
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Accenture (ACN) Surpasses Q4 Earnings Estimates, Rises YoY
Accenture plc (ACN - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results, wherein both earnings & revenues increased year over year.
Adjusted earnings (excluding 4 cents from non-recurring items) of $2.71 per share surpassed the Zacks Consensus Estimate by 3.4% and improved 4.2% from the year-ago fiscal quarter’s reading. The bottom line benefited from higher revenues, streamlined operations and optimization of office space to reduce costs.
Revenues of $15.99 billion missed the Zacks Consensus Estimate by a slight margin but increased 3.7% from the year-ago fiscal quarter’s tally on a reported basis and 4% in terms of local currency. Revenues benefited from improved segmental results except in Communications, Media & Technology.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Revenues in Detail
Based on the type of work, Consulting revenues of $8.2 billion decreased 2% from the year-ago quarter’s reading on a reported basis and local currency and missed our estimate by 1.1%. Managed Services revenues of $7.79 billion increased 10% from the year-ago quarter’s number on a reported basis and, in terms of local currency, beat our estimate by 1.4%.
Segment-wise, Communications, Media & Technology revenues of $2.71 billion missed our estimate by 9.4% and decreased 12% on a reported basis and in terms of local currency. Financial Services revenues of $3.03 billion increased 2% from the year-ago fiscal quarter’s reading on a reported basis and 5% on a local currency basis, thus lagging our estimated $3.06 billion.
Health & Public Service revenues of $3.27 billion increased 13% from the year-ago fiscal quarter’s reading both on a reported basis and local currency basis. The figure surpassed our estimates by 2.8%. Products revenues of $4.75 billion grew 6% from the year-ago fiscal quarter’s number in terms of U.S. dollars and 5% in local currency basis but missed our estimated $4.79 billion. Resources revenues of $2.23 billion increased 10% from the year-ago fiscal quarter’s level on a reported and local currency basis and surpassed our estimate by 13.8%.
Geographically, revenues of $7.55 billion from North America increased 1%, in terms of local currency, from the year-ago fiscal quarter’s figure. Revenues of $5.3 billion from Europe increased 10% on a reported basis and 7% in terms of local currency. Revenues of $3.13 billion from Growth Markets increased 1% year over year on a reported basis and 6% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $16.6 billion in the fiscal fourth quarter, down 10% from the year-ago fiscal quarter’s reading on a reported basis and in terms of local currency. Consulting bookings totaled $8.5 billion and Managed Services bookings summed $8.2 billion.
Operating Results
The gross margin (gross profit as a percentage of net revenues) for third-quarter fiscal 2023 came in at 32.4%, down 30 basis points from the figure reported in the year-ago fiscal period and up 40 basis points from our estimate. Adjusted operating income came at $2.38 billion, missing our estimated $2.41 billion. The operating margin of 14.9% expanded 20 basis points from the year-ago fiscal quarter.
Balance Sheet & Cash Flow
Accenture exited fourth-quarter fiscal 2023 with cash and cash equivalents of $9 billion compared with $8.5 billion at the end of the prior fiscal quarter. Cash provided by operating activities was $3.41 billion for the reported fiscal quarter while capital expenditure came in at $180 million. Free cash flow came in at $3.23 billion.
Guidance
For first-quarter fiscal 2024, Accenture expects revenues to be in the range of $15.85-$16.45 billion. The Zacks Consensus Estimate of $16.27 billion lies above the midpoint ($16.15 billion).
Accenture now expects fiscal 2024 adjusted earnings per share (EPS) to be in the range of $11.97-$12.32. The consensus estimate of earnings is pegged at $12.32.
Accenture expects its adjusted operating margin for the full fiscal year to be 15.5-15.7%.
Operating cash flow is anticipated in the range of $9.3-$9.9 billion. Free cash flow is expected between $8.7 billion and $9.3 billion.
Currently, Accenture carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Stocks to Consider
Here are a few other stocks from the broader Business Services sector, which have performed well in their recent earnings releases:
Automatic Data (ADP - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results. Adjusted EPS of $1.89 (excluding 1 cent from non-recurring items) beat the Zacks Consensus Estimate by 3.3% and grew 26% from the year-ago fiscal quarter’s figure. Total revenues of $4.47 billion beat the consensus estimate by 1.8% and improved 8.5% from the year-ago fiscal quarter’s reading on a reported basis and 9% on an organic constant-currency basis.
TransUnion (TRU - Free Report) reported impressive second-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings of 86 cents per share (adjusting 58 cents from non-recurring items) surpassed the consensus mark by 3.6% but decreased 12.2% year over year.
Total revenues of $968 million beat the consensus mark by 1% and increased 2.1% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.
Gartner (IT - Free Report) reported better-than-expected second-quarter 2023 results. Adjusted EPS (excluding 37 cents from non-recurring items) of $2.85 beat the Zacks Consensus Estimate by 14.9% and matched the year-ago reported figure.