Strong quarterly revenue and profits has allowed Accenture Plc to raise their revenue forecast for the year, performing better than analysts’ expectations. The results are mostly derived from its growing consulting business, particularly in North America.
Company shares rose to a high of $113.18 on Thursday, in early trading and went up by 5.1 per cent. Accenture’s competitors include IBM Corp and two Indian companies, Infosys Ltd and Tata Consulting Services.
Accenture has been driving to expand its digital business with heavy investments in order to deliver better analytics, content management, social media and cloud services to its clients.
Christopher Hickey an analyst from Atlantic Equities said:
“The company is very well positioned for newer, more discretionary projects, particularly around digital initiatives, where it’s certainly taking share.”
According to Hickey in a statement given to the press he said that, unlike some of its competitors, the banking and healthcare industries do not impact heavily on Accenture.
The Irish-incorporated company has increased its full-year earnings expectations from 6-9 per cent, to 8-10 per cent in local currency terms.
The increase in revenue growth has set the revenue forecast anywhere from $33.53 billion to $34.15 billion, performing better than the $32.20 billion average analyst estimates previously reported.
Company revenues are up 12 per cent in dollar terms and 18 per cent in local currency for its consulting division which is drove earnings up to $4.29 billion in the second quarter, as reported February 29.
Accenture’s consulting business accounted for more than half of earnings. It’s other businesses, such as its outsourcing unit raked in $3.65 billion, amounting to an increase of 6 per cent in local currency.
Early morning trading on the New York Stock Exchange saw the company share price rise up to $111.29, an increase of 3.3 per cent.
Accenture’s 18 per cent rise in stock price in the past 12 months outperformed the S&P 500 IT Services index, which recorded a total growth of 0.5 per cent on Wednesday.
Net revenues (before reimbursements) were up to $7.95 billion in the last quarter, rising 6 per cent in dollar terms and 12 for local currency.
Accenture’s net income rose from $1.08 per share in the previous year to $2.08 per share, bringing the company up from $690.7 million to $1.33 billion.
Company earnings were recorded at $1.34 per share excluding items.
Analysts had expected Accenture profits to be at only $1.18 per share with net revenues of $7.72.