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Accenture (ACN) Q4 Earnings Beat Estimates, Revenues Miss
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Accenture plc (ACN - Free Report) reported mixed fourth-quarter fiscal 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Earnings of $2.20 per share beat the consensus estimate by 0.5% and improved 29.4% year over year. The bottom line benefited from higher revenues and operating numbers, lower share count and lower effective tax rate, which were partially offset by higher non-operating expenses.
Revenues of $13.42 billion missed the consensus mark by 0.4% but increased 24% year over year on a reported basis and 21% in terms of local currency. Revenues exceeded the guided range of $13.1-$13.5 billion.
So far this year, shares of Accenture have gained 28.1%, compared with 30% growth of the industry it belongs to and 17.2% increase of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
Revenues in Detail
Based on the type of work, Consulting revenues of $7.31 billion increased 29% year over year on a reported basis and 25% in terms of local currency. Outsourcing revenues of $6.11 billion increased 19% year over year on a reported basis and 16% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $2.77 billion improved 26% year over year on a reported basis and 23% in terms of local currency. Financial Services revenues of $2.61 billion increased 24% year over year on a reported basis and 20% in terms of local currency. Health & Public Service revenues of $2.50 billion increased 20% year over year on a reported basis and 18% in terms of local currency. Products revenues of $3.73 billion grew 29% year over year in U.S. dollars and 25% in terms of local currency. Resources revenues of $1.80 billion increased 17% year over year on a reported basis and 13% in terms of local currency.
Geographically, revenues of $6.39 billion from North America increased 23% year over year on a reported basis and 22% in terms of local currency. Revenues of $4.30 billion from Europe increased 26% on a reported basis and 18% in terms of local currency. Revenues of $2.73 billion from Growth Markets increased 23% year over year on a reported basis and 21% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $15 billion, up 7% year over year on a reported basis and 5% in terms of local currency. Consulting bookings totaled $8 billion and Outsourcing bookings totaled $7.1 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for the fourth quarter of fiscal 2021 increased 150 basis points (bps) to 33.3%. Operating income was $1.96 billion, up 27.3% year over year. Operating margin in the reported quarter expanded 30 bps to 14.6%.
Accenture exited fourth-quarter fiscal 2021 with total cash and cash equivalents balance of $8.17 billion compared with $10 billion at the end of the prior quarter. Long-term debt was $53.5 million compared with $61.6 million at the end of the prior quarter.
Cash provided by operating activities crossed $2.44 billion in the reported quarter. Free cash flow came in at $2.20 billion.
Dividend Payout
On Aug 13, 2021, the company paid out a quarterly cash dividend of 88 cents per share to shareholders of record at the close of business on Jul 15, 2021. These cash dividend payouts totaled $558 million.
The company’s board has raised its quarterly cash dividend by 10% to 97 cents per share, to be paid out on Nov 15, 2021 for shareholders of record at the close of business on Oct 14, 2021.
Share Repurchases
During fourth-quarter fiscal 2021, Accenture repurchased three million shares for $915 million. The company had approximately 633 million total shares outstanding as of Aug 31, 2021.
Guidance
First-Quarter Fiscal 2022
For first-quarter fiscal 2022, Accenture expects revenues of $13.9-$14.35 billion. The expectation is inclusive of a positive foreign-exchange impact of 0.5%. The Zacks Consensus Estimate of $13.47 billion lies below the guidance.
Fiscal 2022
Accenture unveiled its guidance for fiscal year 2021. Revenues are expected to register 12-15% growth in terms of local currency.
The company expects adjusted EPS in the range of $9.9-$10.18. The current Zacks Consensus Estimate of $9.81 lies below the guidance.
Operating cash flow is anticipated in the range of $8.2-$8.7 billion. Free cash flow is expected between $7.5 billion and $8 billion. Operating margin for the fiscal year is expected to be 15.2%-15.4%.
Equifax’s (EFX - Free Report) second-quarter 2021 adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and increased on a year-over-year basis. Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and rose 26% year over year on a reported basis and 23% on a local-currency basis.
Robert Half’s (RHI - Free Report) second-quarter 2021 earnings of $1.33 per share beat the consensus mark by 26.7% and surged more than 100% year over year. Revenues of $1.6 billion surpassed the consensus mark by 6.5% and increased 42.3% year over year on a reported basis and 40% on an adjusted basis.
ManpowerGroup’s (MAN - Free Report) second-quarter 2021 adjusted earnings of $2.02 per share beat the consensus mark by 68.2% and increased more than 100% year over year. Revenues of $5.28 billion beat the consensus mark by 2% and rallied 41% year over year on a reported basis and 31.3% on a constant-currency basis.
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Accenture (ACN) Q4 Earnings Beat Estimates, Revenues Miss
Accenture plc (ACN - Free Report) reported mixed fourth-quarter fiscal 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Earnings of $2.20 per share beat the consensus estimate by 0.5% and improved 29.4% year over year. The bottom line benefited from higher revenues and operating numbers, lower share count and lower effective tax rate, which were partially offset by higher non-operating expenses.
Revenues of $13.42 billion missed the consensus mark by 0.4% but increased 24% year over year on a reported basis and 21% in terms of local currency. Revenues exceeded the guided range of $13.1-$13.5 billion.
So far this year, shares of Accenture have gained 28.1%, compared with 30% growth of the industry it belongs to and 17.2% increase of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
Revenues in Detail
Based on the type of work, Consulting revenues of $7.31 billion increased 29% year over year on a reported basis and 25% in terms of local currency. Outsourcing revenues of $6.11 billion increased 19% year over year on a reported basis and 16% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $2.77 billion improved 26% year over year on a reported basis and 23% in terms of local currency. Financial Services revenues of $2.61 billion increased 24% year over year on a reported basis and 20% in terms of local currency. Health & Public Service revenues of $2.50 billion increased 20% year over year on a reported basis and 18% in terms of local currency. Products revenues of $3.73 billion grew 29% year over year in U.S. dollars and 25% in terms of local currency. Resources revenues of $1.80 billion increased 17% year over year on a reported basis and 13% in terms of local currency.
Geographically, revenues of $6.39 billion from North America increased 23% year over year on a reported basis and 22% in terms of local currency. Revenues of $4.30 billion from Europe increased 26% on a reported basis and 18% in terms of local currency. Revenues of $2.73 billion from Growth Markets increased 23% year over year on a reported basis and 21% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $15 billion, up 7% year over year on a reported basis and 5% in terms of local currency. Consulting bookings totaled $8 billion and Outsourcing bookings totaled $7.1 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for the fourth quarter of fiscal 2021 increased 150 basis points (bps) to 33.3%. Operating income was $1.96 billion, up 27.3% year over year. Operating margin in the reported quarter expanded 30 bps to 14.6%.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Balance Sheet & Cash Flow
Accenture exited fourth-quarter fiscal 2021 with total cash and cash equivalents balance of $8.17 billion compared with $10 billion at the end of the prior quarter. Long-term debt was $53.5 million compared with $61.6 million at the end of the prior quarter.
Cash provided by operating activities crossed $2.44 billion in the reported quarter. Free cash flow came in at $2.20 billion.
Dividend Payout
On Aug 13, 2021, the company paid out a quarterly cash dividend of 88 cents per share to shareholders of record at the close of business on Jul 15, 2021. These cash dividend payouts totaled $558 million.
The company’s board has raised its quarterly cash dividend by 10% to 97 cents per share, to be paid out on Nov 15, 2021 for shareholders of record at the close of business on Oct 14, 2021.
Share Repurchases
During fourth-quarter fiscal 2021, Accenture repurchased three million shares for $915 million. The company had approximately 633 million total shares outstanding as of Aug 31, 2021.
Guidance
First-Quarter Fiscal 2022
For first-quarter fiscal 2022, Accenture expects revenues of $13.9-$14.35 billion. The expectation is inclusive of a positive foreign-exchange impact of 0.5%. The Zacks Consensus Estimate of $13.47 billion lies below the guidance.
Fiscal 2022
Accenture unveiled its guidance for fiscal year 2021. Revenues are expected to register 12-15% growth in terms of local currency.
The company expects adjusted EPS in the range of $9.9-$10.18. The current Zacks Consensus Estimate of $9.81 lies below the guidance.
Operating cash flow is anticipated in the range of $8.2-$8.7 billion. Free cash flow is expected between $7.5 billion and $8 billion. Operating margin for the fiscal year is expected to be 15.2%-15.4%.
Currently, Accenture carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s (EFX - Free Report) second-quarter 2021 adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and increased on a year-over-year basis. Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and rose 26% year over year on a reported basis and 23% on a local-currency basis.
Robert Half’s (RHI - Free Report) second-quarter 2021 earnings of $1.33 per share beat the consensus mark by 26.7% and surged more than 100% year over year. Revenues of $1.6 billion surpassed the consensus mark by 6.5% and increased 42.3% year over year on a reported basis and 40% on an adjusted basis.
ManpowerGroup’s (MAN - Free Report) second-quarter 2021 adjusted earnings of $2.02 per share beat the consensus mark by 68.2% and increased more than 100% year over year. Revenues of $5.28 billion beat the consensus mark by 2% and rallied 41% year over year on a reported basis and 31.3% on a constant-currency basis.