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Accenture plc (ACN - Free Report) reported mixed first-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the mark.
Adjusted earnings (excluding 17 cents from non-recurring items) of $3.27 per share surpassed the Zacks Consensus Estimate by 4.1% and improved 6% 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 $16.22 billion missed the consensus estimate by a slight margin but increased 3% from the year-ago fiscal quarter’s tally on a reported basis and 1% in terms of local currency. Revenues benefited from improved segmental results except in Communications, Media & Technology.
Revenues in Detail
Based on the type of work, Consulting revenues of $8.46 billion matched the year-ago quarter’s reading on a reported basis and declined 2% in terms of local currency. The figure missed our estimate by a slight margin. Managed Services revenues of $7.77 billion increased 6% from the year-ago quarter’s number on a reported basis and 5% in terms of local currency, beating our estimate by a slight margin.
Segment-wise, Communications, Media & Technology revenues of $2.67 billion missed our estimate by 7.9% and decreased 10% on a reported basis and in 11% 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 but lagged our estimated $3.07 billion.
Health & Public Service revenues of $3.38 billion increased 13% from the year-ago fiscal quarter’s reading on a reported basis and 12% on a local currency basis. The figure surpassed our estimate by 6.6%. Products revenues of $4.86 billion grew 4% from the year-ago fiscal quarter’s number in terms of U.S. dollars and 1% in local currency basis, beating our estimated $4.83 billion. Resources revenues of $2.28 billion increased 7% from the year-ago fiscal quarter’s level on a reported and 6% on a local currency basis, surpassing our estimate by 1.8%.
Geographically, revenues of $7.56 billion from North America decreased 1% in terms of local currency from the year-ago fiscal quarter’s figure. Revenues of $5.8 billion from Europe increased 9% on a reported basis and 2% in terms of local currency. Revenues of $2.86 billion from Growth Markets increased 2% year over year on a reported basis and 5% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $18.45 billion in the fiscal 2024 first quarter, up 14% from the year-ago fiscal quarter’s reading on a reported basis and 12% in terms of local currency. Consulting bookings totaled $8.62 billion and Managed Services bookings summed $9.83 billion.
Operating Results
The gross margin (gross profit as a percentage of net revenues) for first-quarter fiscal 2024 was 33.6%, up 70 basis points from the figure reported in the year-ago fiscal period. Adjusted operating income was $2.7 billion, up 4.2% from the year-ago figure. The operating margin of 16.7% expanded 20 basis points from the year-ago fiscal quarter.
Balance Sheet & Cash Flow
Accenture exited first-quarter fiscal 2024 with cash and cash equivalents of $7.14 billion compared with $9 billion at the end of the prior fiscal quarter. Cash provided by operating activities was $499 million for the reported fiscal quarter while capital expenditure was $69 million. Free cash flow was $430 million.
Accenture repurchased 3.8 million shares for a total of $1.2 billion, including approximately 3.4 million shares repurchased in the open market. The company paid a dividend of $810 million in the first quarter of fiscal 2024.
Guidance
The company expects revenues for the second quarter of fiscal 2024 to be in the range of $15.4 billion and $16 billion. The Zacks Consensus Estimate for the second-quarter revenues is pegged at $16.36 billion, which is higher than the guided range.
Accenture 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 $12.21 per share, higher than the midpoint of the guided range ($12.15).
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 stocks from the broader Business Services sector, which have performed well in their recent earnings releases:
ABM Industries Inc. (ABM - Free Report) reported impressivefourth-quarter fiscal 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate.
Adjusted earnings (considering 5 cents from non-recurring items) were $1.01 per share, which beat the consensus estimate by 8.6% and increased 13.5% from last fiscal year’s quarterly figure.
Total revenues of $2.09 billion beat the consensus mark by 2.8% and improved 4.1% from the last fiscal year’s quarterly figure. The upside was backed by solid segmental performance, strength from new accounts that came online late last year and the acquisition of RavenVolt. Quarterly revenue growth included 3.8% organic growth and a 0.3% upside from acquisitions.
S&P Global Inc. (SPGI - Free Report) reported impressive third-quarter results wherein earnings and revenues beat the Zacks Consensus Estimate.
SPGI’s adjusted EPS (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat the consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in each of its divisions.
Verisk Analytics Inc.(VRSK - Free Report) reported impressive third-quarter 2023 results wherein earnings and revenues beat the respective estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the Zacks Consensus Estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in Underwriting Data Solutions, Life Insurance and Extreme Events Solutions.
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Accenture (ACN) Surpasses Q1 Earnings Estimates, Rises YoY
Accenture plc (ACN - Free Report) reported mixed first-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the mark.
Adjusted earnings (excluding 17 cents from non-recurring items) of $3.27 per share surpassed the Zacks Consensus Estimate by 4.1% and improved 6% 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 $16.22 billion missed the consensus estimate by a slight margin but increased 3% from the year-ago fiscal quarter’s tally on a reported basis and 1% in terms of local currency. Revenues benefited from improved segmental results except in Communications, Media & Technology.
Revenues in Detail
Based on the type of work, Consulting revenues of $8.46 billion matched the year-ago quarter’s reading on a reported basis and declined 2% in terms of local currency. The figure missed our estimate by a slight margin. Managed Services revenues of $7.77 billion increased 6% from the year-ago quarter’s number on a reported basis and 5% in terms of local currency, beating our estimate by a slight margin.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Segment-wise, Communications, Media & Technology revenues of $2.67 billion missed our estimate by 7.9% and decreased 10% on a reported basis and in 11% 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 but lagged our estimated $3.07 billion.
Health & Public Service revenues of $3.38 billion increased 13% from the year-ago fiscal quarter’s reading on a reported basis and 12% on a local currency basis. The figure surpassed our estimate by 6.6%. Products revenues of $4.86 billion grew 4% from the year-ago fiscal quarter’s number in terms of U.S. dollars and 1% in local currency basis, beating our estimated $4.83 billion. Resources revenues of $2.28 billion increased 7% from the year-ago fiscal quarter’s level on a reported and 6% on a local currency basis, surpassing our estimate by 1.8%.
Geographically, revenues of $7.56 billion from North America decreased 1% in terms of local currency from the year-ago fiscal quarter’s figure. Revenues of $5.8 billion from Europe increased 9% on a reported basis and 2% in terms of local currency. Revenues of $2.86 billion from Growth Markets increased 2% year over year on a reported basis and 5% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $18.45 billion in the fiscal 2024 first quarter, up 14% from the year-ago fiscal quarter’s reading on a reported basis and 12% in terms of local currency. Consulting bookings totaled $8.62 billion and Managed Services bookings summed $9.83 billion.
Operating Results
The gross margin (gross profit as a percentage of net revenues) for first-quarter fiscal 2024 was 33.6%, up 70 basis points from the figure reported in the year-ago fiscal period. Adjusted operating income was $2.7 billion, up 4.2% from the year-ago figure. The operating margin of 16.7% expanded 20 basis points from the year-ago fiscal quarter.
Balance Sheet & Cash Flow
Accenture exited first-quarter fiscal 2024 with cash and cash equivalents of $7.14 billion compared with $9 billion at the end of the prior fiscal quarter. Cash provided by operating activities was $499 million for the reported fiscal quarter while capital expenditure was $69 million. Free cash flow was $430 million.
Accenture repurchased 3.8 million shares for a total of $1.2 billion, including approximately 3.4 million shares repurchased in the open market. The company paid a dividend of $810 million in the first quarter of fiscal 2024.
Guidance
The company expects revenues for the second quarter of fiscal 2024 to be in the range of $15.4 billion and $16 billion. The Zacks Consensus Estimate for the second-quarter revenues is pegged at $16.36 billion, which is higher than the guided range.
Accenture 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 $12.21 per share, higher than the midpoint of the guided range ($12.15).
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 #2 (Buy). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Other Stocks to Consider
Here are a few stocks from the broader Business Services sector, which have performed well in their recent earnings releases:
ABM Industries Inc. (ABM - Free Report) reported impressivefourth-quarter fiscal 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate.
Adjusted earnings (considering 5 cents from non-recurring items) were $1.01 per share, which beat the consensus estimate by 8.6% and increased 13.5% from last fiscal year’s quarterly figure.
Total revenues of $2.09 billion beat the consensus mark by 2.8% and improved 4.1% from the last fiscal year’s quarterly figure. The upside was backed by solid segmental performance, strength from new accounts that came online late last year and the acquisition of RavenVolt. Quarterly revenue growth included 3.8% organic growth and a 0.3% upside from acquisitions.
S&P Global Inc. (SPGI - Free Report) reported impressive third-quarter results wherein earnings and revenues beat the Zacks Consensus Estimate.
SPGI’s adjusted EPS (excluding 88 cents from non-recurring items) of $3.21 rose 9.6% year over year and beat the consensus estimate by 5.3%. Revenues of $3.08 billion surpassed the consensus estimate by 2% and improved 8% year over year, backed by strong performance in each of its divisions.
Verisk Analytics Inc.(VRSK - Free Report) reported impressive third-quarter 2023 results wherein earnings and revenues beat the respective estimates.
VRSK’s adjusted earnings (excluding 23 cents from non-recurring items) were $1.52 per share, beating the Zacks Consensus Estimate and increasing 4.1% from the year-ago reported figure. Such a beat was supported by strong growth in Underwriting Data Solutions, Life Insurance and Extreme Events Solutions.