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Earnings of $2.54 per share beat the consensus estimate by 7.6% and improved 25.1% year over year. The bottom line benefited from higher revenues and operating results, lower non-operating expenses, partially offset by higher effective tax rate.
Revenues of $15.05 billion beat the consensus mark by 2.7% and increased 24% year over year on a reported basis and 28% in terms of local currency. Revenues exceeded the guided range of $14.30-$14.75 billion.
During the reported quarter, the company witnessed continued solid, broad-based demand across all of its markets, services and industries.
Over the past year, shares of Accenture have gained 23% compared with 21.2% growth of the industry it belongs to and 7.3% 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 $8.32 billion increased 29% year over year on a reported basis and 34% in terms of local currency. Outsourcing revenues of $6.72 billion increased 19% year over year on a reported basis and 23% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $3.19 billion improved 29% year over year on a reported basis and 32% in terms of local currency. Financial Services revenues of $2.87 billion increased 21% year over year on a reported basis and 25% in terms of local currency. Health & Public Service revenues of $2.69 billion increased 19% year over year on a reported basis and 21% in terms of local currency. Products revenues of $4.33 billion grew 30% year over year in U.S. dollars and 34% in terms of local currency. Resources revenues of $1.97 billion increased 21% year over year on a reported basis and 25% in terms of local currency.
Geographically, revenues of $7.08 billion from North America increased 26% year over year on a reported basis and in terms of local currency. Revenues of $5.01 billion from Europe increased 24% on a reported basis and 31% in terms of local currency. Revenues of $2.96 billion from Growth Markets increased 22% year over year on a reported basis and 30% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $19.6 billion in the quarter, up 22% year over year on a reported basis and 26% in terms of local currency. Consulting bookings totaled $10.9 billion and Outsourcing bookings summed $8.7 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for second-quarter fiscal 2021 came in at 30.1% compared with 29.7% in the year-ago period. Operating income grew 25% year over year to $2.06 billion. Operating margin of 13.7% remained flat year over year.
Accenture exited second-quarter fiscal 2022 with total cash and cash equivalent balance of $5.47 billion compared with $5.64 billion at the end of the prior quarter. Long-term debt was $52.2 million compared with $55.8 million at the end of the prior quarter.
Cash provided by operating activities was $2.16 billion for the reported quarter. Free cash flow came in at $1.99 billion.
Dividend Payout
On Feb 15, 2022, the company paid out a quarterly cash dividend of 97 cents per share to shareholders of record at the close of business on Jan 13, 2022. These cash dividend payouts totaled $617 million.
Accenture announced another quarterly cash dividend of 97 cents per share, to be paid out on May 13, 2022, to shareholders of record at the close of business on Apr 14, 2022.
Share Repurchases
During second-quarter fiscal 2022, Accenture repurchased 4.6 million shares for $1.69 billion. The company had approximately 634 million total shares outstanding as of Feb 28, 2022.
Guidance
For third-quarter fiscal 2022, Accenture expects revenues of $15.7-$16.15 billion. The Zacks Consensus Estimate of $14.65 billion lies below the guidance.
Accenture raised its guidance for fiscal 2022. Revenues are now expected to register 24-26% growth compared with the prior growth rate of 19-22%.
The company now expects fiscal 2022 EPS in the range of $10.61-$10.81 compared with the prior guidance of $10.32-$10.60. The current Zacks Consensus Estimate of $10.54 lies below the guidance.
Operating cash flow is now anticipated in the range of $8.7-$9.2 billion compared with the prior guided range of $8.4-$8.9 billion. Free cash flow is expected between $8.0 billion and $8.5 billion compared with the prior-guided range of $7.7-$8.2 billion.
The company now expects to return nearly $6.5 billion in cash to shareholders through dividend payments and share repurchases, compared with the prior guidance of $6.3 billion.
Robert Half International (RHI - Free Report) delivered impressive fourth-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.
Robert Half’s quarterly earnings of $1.51 per share beat the consensus mark by 5.6% and rose 79.8% year over year.
Robert Half’s revenues of $1.77 billion surpassed the consensus mark by 4.3% and increased 36.2% year over year on a reported basis and 36% on an as-adjusted basis.
ADP’s adjusted earnings per share of $1.65 beat the Zacks Consensus Estimate by 1.2% and rose 9% year over year.
ADP’s total revenues of $4.03 billion beat the consensus mark by 1.1% and improved 9% year over year on a reported basis as well as on an organic constant-currency basis.
Rollins (ROL - Free Report) reported mixed fourth-quarter 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same.
Rollins’ adjusted earnings of 14 cents per share meet the Zacks Consensus Estimate and increased 7.7% year over year.
Rollins’ revenues of $600.3 million beat the consensus mark by 3.3% and improved 11.9% year over year.
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Accenture (ACN) Q2 Earnings, Revenues Top Estimates, View Up
Accenture plc (ACN - Free Report) reported solid second-quarter fiscal 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Earnings of $2.54 per share beat the consensus estimate by 7.6% and improved 25.1% year over year. The bottom line benefited from higher revenues and operating results, lower non-operating expenses, partially offset by higher effective tax rate.
Revenues of $15.05 billion beat the consensus mark by 2.7% and increased 24% year over year on a reported basis and 28% in terms of local currency. Revenues exceeded the guided range of $14.30-$14.75 billion.
During the reported quarter, the company witnessed continued solid, broad-based demand across all of its markets, services and industries.
Over the past year, shares of Accenture have gained 23% compared with 21.2% growth of the industry it belongs to and 7.3% 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 $8.32 billion increased 29% year over year on a reported basis and 34% in terms of local currency. Outsourcing revenues of $6.72 billion increased 19% year over year on a reported basis and 23% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $3.19 billion improved 29% year over year on a reported basis and 32% in terms of local currency. Financial Services revenues of $2.87 billion increased 21% year over year on a reported basis and 25% in terms of local currency. Health & Public Service revenues of $2.69 billion increased 19% year over year on a reported basis and 21% in terms of local currency. Products revenues of $4.33 billion grew 30% year over year in U.S. dollars and 34% in terms of local currency. Resources revenues of $1.97 billion increased 21% year over year on a reported basis and 25% in terms of local currency.
Geographically, revenues of $7.08 billion from North America increased 26% year over year on a reported basis and in terms of local currency. Revenues of $5.01 billion from Europe increased 24% on a reported basis and 31% in terms of local currency. Revenues of $2.96 billion from Growth Markets increased 22% year over year on a reported basis and 30% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $19.6 billion in the quarter, up 22% year over year on a reported basis and 26% in terms of local currency. Consulting bookings totaled $10.9 billion and Outsourcing bookings summed $8.7 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for second-quarter fiscal 2021 came in at 30.1% compared with 29.7% in the year-ago period. Operating income grew 25% year over year to $2.06 billion. Operating margin of 13.7% remained flat year over year.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Balance Sheet & Cash Flow
Accenture exited second-quarter fiscal 2022 with total cash and cash equivalent balance of $5.47 billion compared with $5.64 billion at the end of the prior quarter. Long-term debt was $52.2 million compared with $55.8 million at the end of the prior quarter.
Cash provided by operating activities was $2.16 billion for the reported quarter. Free cash flow came in at $1.99 billion.
Dividend Payout
On Feb 15, 2022, the company paid out a quarterly cash dividend of 97 cents per share to shareholders of record at the close of business on Jan 13, 2022. These cash dividend payouts totaled $617 million.
Accenture announced another quarterly cash dividend of 97 cents per share, to be paid out on May 13, 2022, to shareholders of record at the close of business on Apr 14, 2022.
Share Repurchases
During second-quarter fiscal 2022, Accenture repurchased 4.6 million shares for $1.69 billion. The company had approximately 634 million total shares outstanding as of Feb 28, 2022.
Guidance
For third-quarter fiscal 2022, Accenture expects revenues of $15.7-$16.15 billion. The Zacks Consensus Estimate of $14.65 billion lies below the guidance.
Accenture raised its guidance for fiscal 2022. Revenues are now expected to register 24-26% growth compared with the prior growth rate of 19-22%.
The company now expects fiscal 2022 EPS in the range of $10.61-$10.81 compared with the prior guidance of $10.32-$10.60. The current Zacks Consensus Estimate of $10.54 lies below the guidance.
Operating cash flow is now anticipated in the range of $8.7-$9.2 billion compared with the prior guided range of $8.4-$8.9 billion. Free cash flow is expected between $8.0 billion and $8.5 billion compared with the prior-guided range of $7.7-$8.2 billion.
The company now expects to return nearly $6.5 billion in cash to shareholders through dividend payments and share repurchases, compared with the prior guidance of $6.3 billion.
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
Robert Half International (RHI - Free Report) delivered impressive fourth-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate.
Robert Half’s quarterly earnings of $1.51 per share beat the consensus mark by 5.6% and rose 79.8% year over year.
Robert Half’s revenues of $1.77 billion surpassed the consensus mark by 4.3% and increased 36.2% year over year on a reported basis and 36% on an as-adjusted basis.
Automatic Data Processing (ADP - Free Report) reported better-than-expected second-quarter fiscal 2022 results.
ADP’s adjusted earnings per share of $1.65 beat the Zacks Consensus Estimate by 1.2% and rose 9% year over year.
ADP’s total revenues of $4.03 billion beat the consensus mark by 1.1% and improved 9% year over year on a reported basis as well as on an organic constant-currency basis.
Rollins (ROL - Free Report) reported mixed fourth-quarter 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same.
Rollins’ adjusted earnings of 14 cents per share meet the Zacks Consensus Estimate and increased 7.7% year over year.
Rollins’ revenues of $600.3 million beat the consensus mark by 3.3% and improved 11.9% year over year.