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Accenture (ACN) Beats on Q4 Earnings, Hikes 15% Dividend
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Accenture plc (ACN - Free Report) reported mixed fourth-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
Earnings of $2.60 per share surpassed the consensus estimate by 1.2% and improved 18.2% from the year-ago fiscal quarter’s reading. The bottom line benefited from higher revenues and operating results, lower share count, decreased non-operating expenses and a fall in the effective tax rate, partially offset by higher non-controlling interest.
Revenues of $15.4 billion missed the consensus mark by 0.2% but increased 15% from the year-ago fiscal quarter’s tally on a reported basis and 22.4% in terms of local currency. Revenues almost matched the upper-end of the guided range of $15-$15.5 billion.
Over the past year, shares of Accenture have dropped 22.6% compared with the 19.5% decline of the industry it belongs to.
Image Source: Zacks Investment Research
Revenues in Detail
Based on the type of work, Consulting revenues of $8.33 billion increased 14% from the year-ago fiscal quarter’s reading on a reported basis and 22% in terms of local currency. Outsourcing revenues of $7.09 billion increased 16% from the year-ago fiscal quarter’s number on a reported basis and 23% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $3.08 billion improved 16% from the year-ago fiscal quarter’s actuals on a reported basis and 23% in terms of local currency. Financial Services revenues of $2.94 billion increased 13% from the year-ago fiscal quarter’s reading on a reported basis and 22% on local currency basis. Health & Public Service revenues of $2.89 billion increased 15% from the year-ago fiscal quarter’s reading on a reported basis and 19% in terms of local currency. Products revenues of $4.48 billion grew 16% from the year-ago fiscal quarter’s number in U.S. dollars and 25% in terms of local currency. Resources revenues of $2.03 billion increased 13% from the year-ago fiscal quarter’s level on a reported basis and 21% in local currency.
Geographically, revenues of $7.52 billion from North America increased 18% from the year-ago fiscal quarter’s figure on a reported basis and in terms of local currency. Revenues of $4.8 billion from Europe increased 12% on a reported basis and 26% in terms of local currency. Revenues of $3.1 billion from Growth Markets increased 13% year over year on a reported basis and 26% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $18.4 billion in the fiscal fourth quarter, up 22% from the year-ago fiscal quarter’s reading on a reported basis and 31% in terms of local currency. Consulting bookings totaled $8.4 billion and Outsourcing bookings summed $9.9 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for fourth-quarter fiscal 2022 came in at 32.1% compared with 33.3% in the year-ago fiscal period. Operating income grew 15.8% from the year-ago fiscal quarter’s reading to $2.27 billion. Operating margin of 14.7% rose from 14.6% in the year-ago fiscal quarter.
Balance Sheet & Cash Flow
Accenture exited fourth-quarter fiscal 2022 with a total cash and cash equivalent balance of $7.89 billion compared with $5.64 billion at the end of the prior fiscal quarter. Long-term debt was $45.9 million compared with $55.8 million at the end of the prior fiscal quarter.
Cash provided by operating activities was $3.79 billion for the reported fiscal quarter. Free cash flow came in at $3.6 billion.
Dividend Hike
On Aug 15, 2022, ACN paid out a quarterly cash dividend of 97 cents per share to its shareholders of record at the close of business on Jul 14, 2022. The cash dividend payouts totaled $614 million.
Accenture announced a 15% increase in dividend payment to $1.12 per share. The hiked dividend will be paid out on Nov 15, 2022, to its shareholders of record at the close of business on Oct 13, 2022.
Share Repurchases
During fourth-quarter fiscal 2022, Accenture repurchased 2.1 million shares for $605 million.
Guidance
For first-quarter fiscal 2023, Accenture expects revenues of $15.2-$15.75 billion. The Zacks Consensus Estimate of $16.22 billion lies above the guided range.
For fiscal 2023, revenues are expected to register 8-11% growth in local currency.
Accenture expects fiscal 2023 EPS in the range of $11.09-$11.41. The current Zacks Consensus Estimate of $10.69 lies below the guided range.
Accenture expects its operating margin for the full fiscal in the 15.3-15.5% range.
Operating cash flow is anticipated in the range of $8.5-$9.0 billion. Free cash flow is expected between $7.7 billion and $8.2 billion. ACN expects to return $7.1 billion of cash to its shareholders through dividend payments and share repurchases.
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.
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Accenture (ACN) Beats on Q4 Earnings, Hikes 15% Dividend
Accenture plc (ACN - Free Report) reported mixed fourth-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
Earnings of $2.60 per share surpassed the consensus estimate by 1.2% and improved 18.2% from the year-ago fiscal quarter’s reading. The bottom line benefited from higher revenues and operating results, lower share count, decreased non-operating expenses and a fall in the effective tax rate, partially offset by higher non-controlling interest.
Revenues of $15.4 billion missed the consensus mark by 0.2% but increased 15% from the year-ago fiscal quarter’s tally on a reported basis and 22.4% in terms of local currency. Revenues almost matched the upper-end of the guided range of $15-$15.5 billion.
Over the past year, shares of Accenture have dropped 22.6% compared with the 19.5% decline of the industry it belongs to.
Image Source: Zacks Investment Research
Revenues in Detail
Based on the type of work, Consulting revenues of $8.33 billion increased 14% from the year-ago fiscal quarter’s reading on a reported basis and 22% in terms of local currency. Outsourcing revenues of $7.09 billion increased 16% from the year-ago fiscal quarter’s number on a reported basis and 23% in terms of local currency.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Accenture PLC Price, Consensus and EPS Surprise Accenture PLC Price, Consensus and EPS Surprise Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Segment-wise, Communications, Media & Technology revenues of $3.08 billion improved 16% from the year-ago fiscal quarter’s actuals on a reported basis and 23% in terms of local currency. Financial Services revenues of $2.94 billion increased 13% from the year-ago fiscal quarter’s reading on a reported basis and 22% on local currency basis. Health & Public Service revenues of $2.89 billion increased 15% from the year-ago fiscal quarter’s reading on a reported basis and 19% in terms of local currency. Products revenues of $4.48 billion grew 16% from the year-ago fiscal quarter’s number in U.S. dollars and 25% in terms of local currency. Resources revenues of $2.03 billion increased 13% from the year-ago fiscal quarter’s level on a reported basis and 21% in local currency.
Geographically, revenues of $7.52 billion from North America increased 18% from the year-ago fiscal quarter’s figure on a reported basis and in terms of local currency. Revenues of $4.8 billion from Europe increased 12% on a reported basis and 26% in terms of local currency. Revenues of $3.1 billion from Growth Markets increased 13% year over year on a reported basis and 26% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $18.4 billion in the fiscal fourth quarter, up 22% from the year-ago fiscal quarter’s reading on a reported basis and 31% in terms of local currency. Consulting bookings totaled $8.4 billion and Outsourcing bookings summed $9.9 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for fourth-quarter fiscal 2022 came in at 32.1% compared with 33.3% in the year-ago fiscal period. Operating income grew 15.8% from the year-ago fiscal quarter’s reading to $2.27 billion. Operating margin of 14.7% rose from 14.6% in the year-ago fiscal quarter.
Balance Sheet & Cash Flow
Accenture exited fourth-quarter fiscal 2022 with a total cash and cash equivalent balance of $7.89 billion compared with $5.64 billion at the end of the prior fiscal quarter. Long-term debt was $45.9 million compared with $55.8 million at the end of the prior fiscal quarter.
Cash provided by operating activities was $3.79 billion for the reported fiscal quarter. Free cash flow came in at $3.6 billion.
Dividend Hike
On Aug 15, 2022, ACN paid out a quarterly cash dividend of 97 cents per share to its shareholders of record at the close of business on Jul 14, 2022. The cash dividend payouts totaled $614 million.
Accenture announced a 15% increase in dividend payment to $1.12 per share. The hiked dividend will be paid out on Nov 15, 2022, to its shareholders of record at the close of business on Oct 13, 2022.
Share Repurchases
During fourth-quarter fiscal 2022, Accenture repurchased 2.1 million shares for $605 million.
Guidance
For first-quarter fiscal 2023, Accenture expects revenues of $15.2-$15.75 billion. The Zacks Consensus Estimate of $16.22 billion lies above the guided range.
For fiscal 2023, revenues are expected to register 8-11% growth in local currency.
Accenture expects fiscal 2023 EPS in the range of $11.09-$11.41. The current Zacks Consensus Estimate of $10.69 lies below the guided range.
Accenture expects its operating margin for the full fiscal in the 15.3-15.5% range.
Operating cash flow is anticipated in the range of $8.5-$9.0 billion. Free cash flow is expected between $7.7 billion and $8.2 billion. ACN expects to return $7.1 billion of cash to its shareholders through dividend payments and share repurchases.
Currently, Accenture carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Business Services Companies
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.