New York: Accenture has reported flat financial results for the second quarter of fiscal 2014, but remains confident of meeting full year expectations.
- Revenues increase 1% in U.S. dollars and 3% in local currency to $7.13 billion
- Operating income is $951 million
- Record new bookings of $10.1 billion include consulting bookings of $4.6 billion and outsourcing bookings of $5.5 billion
In the quarter ended Feb. 28, 2014 net revenues were $7.13 billion, an increase of 1 percent in U.S. dollars and 3 percent in local currency over the same period last year.
Operating income for the quarter was down 18% to $951 million, or 13.3 percent of net revenues, compared with $1.16 billion, or 16.5 percent of net revenues, for the second quarter last year. However that quarter included the benefit of $224 million from the reduction in reorganization liabilities. Excluding the benefit, operating income for the second quarter of fiscal 2013 was $940 million, or 13.3 percent of net revenues.
New bookings for the quarter were a record $10.1 billion, with consulting bookings of $4.6 billion and outsourcing bookings of $5.5 billion.
Pierre Nanterme, Accenture's chairman and CEO, said, "In the second quarter, we delivered revenues within our guided range, reported solid earnings per share and returned substantial cash to shareholders. We continued to see very strong demand for our services, with $10.1 billion in new bookings, including record consulting and record outsourcing bookings.
"Looking ahead, we are well-positioned to deliver our business outlook for the year, given our outstanding year-to-date bookings of $18.8 billion as well as the activity and client interest we see in the marketplace. We remain focused on the successful execution of our growth strategy, and are confident in our ability to deliver value to our clients and our shareholders."
Consulting net revenues for the quarter were $3.70 billion, a decrease of 1 percent in U.S. dollars and flat in local currency compared with the second quarter of fiscal 2013.
Outsourcing net revenues were $3.43 billion, an increase of 4 percent in U.S. dollars and 5 percent in local currency over the second quarter of fiscal 2013.
Accenture said that operating results for the quarter reflect lower contract profitability, primarily due to pricing pressures and higher payroll costs and, to a lesser extent, lower margins in the early stages of a few large contracts. Operating results also reflect a higher level of investment in the quarter to build new capabilities including strategic acquisitions to enhance the company's capabilities in key growth areas. These factors were offset by a reduction in variable compensation expense compared to the second quarter of fiscal 2013.
New bookings for the second quarter were $10.1 billion and reflect a negative 2 percent foreign-currency impact compared with new bookings in the second quarter last year.
- Consulting new bookings were $4.6 billion, or 46 percent of total new bookings.
- Outsourcing new bookings were $5.5 billion, or 54 percent of total new bookings.
Third Quarter Fiscal 2014
Accenture expects net revenues for the third quarter of fiscal 2014 to be in the range of $7.40 billion to $7.65 billion. This range assumes a foreign-exchange impact of zero percent compared with the third quarter of fiscal 2013.
Full Fiscal Year 2014
For fiscal 2014, the company now expects net revenue growth to be in the range of 3 percent to 6 percent in local currency, compared with 2 percent to 6 percent previously.