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Accenture (ACN) Q1 Earnings, Revenues Top Estimates, View Up

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Accenture plc (ACN - Free Report) reported solid first-quarter fiscal 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

Earnings of $2.78 per share beat the consensus estimate by 6.1% and improved year over year. The bottom line benefited from higher revenues and lower share count, partially offset by an increased effective tax rate.

Revenues of $14.97 billion beat the consensus mark by 5.4% and increased 27% year over year on a reported basis and in terms of local currency. Revenues exceeded the guided range of $13.9-$14.35 billion.

So far this year, shares of Accenture have gained 43.7% compared with 45.9% growth of the industry it belongs to and 26.4% increase of the Zacks S&P 500 composite.

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Revenues in Detail

Based on the type of work, Consulting revenues of $8.39 billion increased 33% year over year on a reported basis and 32% in terms of local currency. Outsourcing revenues of $6.57 billion increased 21% year over year on a reported basis and in terms of local currency.

Segment-wise, Communications, Media & Technology revenues of $3.08 billion improved 32% year over year on a reported basis and in terms of local currency. Financial Services revenues of $2.92 billion increased 24% year over year on a reported basis and in terms of local currency. Health & Public Service revenues of $2.73 billion increased 23% year over year on a reported basis and in terms of local currency. Products revenues of $4.28 billion grew 34% year over year in U.S. dollars and in terms of local currency. Resources revenues of $1.95 billion increased 17% year over year on a reported basis and in terms of local currency.

Geographically, revenues of $6.91 billion from North America increased 26% year over year on a reported basis and in terms of local currency. Revenues of $5.10 billion from Europe increased 29% on a reported basis and 28% in terms of local currency. Revenues of $2.96 billion from Growth Markets increased 28% year over year on a reported basis and 30% in terms of local currency.

Booking Trends

Accenture reported new bookings worth $16.8 billion, up 30% year over year on a reported basis and in terms of local currency. Consulting bookings totaled $9.4 billion and Outsourcing bookings summed $7.4 billion.

Operating Results

Gross margin (gross profit as a percentage of net revenues) for first-quarter fiscal 2021 came in at 32.9% compared with 33.1% in the year-ago period. Operating income grew 29% year over year to $2.43 billion. Operating margin for the reported quarter expanded 20 basis points to 16.3%.

Accenture PLC Price, Consensus and EPS Surprise

Accenture PLC Price, Consensus and EPS Surprise

Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote

Balance Sheet & Cash Flow

Accenture exited first-quarter fiscal 2022 with total cash and cash equivalent balance of $5.64 billion compared with $8.17 billion at the end of the prior quarter. Long-term debt was $55.8 million compared with $53.5 million at the end of the prior quarter.

Cash provided by operating activities was 531 million for the reported quarter. Free cash flow came in at $349 million.

Dividend Payout

On Nov 15, 2021, the company paid out a quarterly cash dividend of 97 cents per share to shareholders of record at the close of business on Oct 14, 2021. These cash dividend payouts totaled $613 million.

ACN announced another quarterly cash dividend of 97 cents per share, to be paid out on Feb 15, 2022, to shareholders of record at the close of business on Jan 13, 2022.

Share Repurchases

During first-quarter fiscal 2022, Accenture repurchased 2.4 million shares for $845 million. The company had approximately 633 million total shares outstanding as of Nov 31, 2021.

Guidance

Second-Quarter Fiscal 2022

For second-quarter fiscal 2022, Accenture expects revenues of $14.3-$14.75 billion. The Zacks Consensus Estimate of $14.04 billion lies below the guidance.

Fiscal 2022

Accenture raised its guidance for fiscal 2021. Revenues are now expected to register 19-22% growth compared with the prior growth rate of 12-15%.

The company now expects EPS in the range of $10.32-$10.60 compared
with the prior guidance of $9.9-$10.18. The current Zacks Consensus Estimate of $10.12 lies below the guidance.

Operating cash flow is now anticipated in the range of $8.4-$8.9 billion compared with the prior guided range of $8.2-$8.7 billion. Free cash flow is expected between $7.7 billion and $8.2 billion compared with the prior guided range of $7.5-$8 billion. Operating margin for the fiscal year is still expected to be 15.2-15.4%.

Currently, Accenture carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Business Services Companies

Equifax’s (EFX - Free Report) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year on a reported and 14% on a local-currency basis.

IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and improved 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year on a reported and 21.1% on a constant-currency basis.

Omnicom’s(OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion also surpassed the consensus estimate by 0.6% and increased 7.1% year over year.


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