Accenture records rise in Q2 earnings

15 Apr 2003

Consulting firm Accenture, which employs 600 people in Dublin, has announced that its second quarterly earnings rose significantly from the previous year’s equivalent.

Its net income increased to US$118.7m from US$10.6m for the previous year.

Excluding minority interest and nearly US$211m in investment losses the prior year, Accenture earned US$249.9m, or 25 cents per share, compared with US$236.1m, or 23 cents per share, in 2002.

The company ended the quarter with nearly 1.7bn in cash up US$211m for the prior quarter and up US$368m from 31 August, 2002.

Net revenues in Accenture’s Europe, the Middle East and Africa (EMEA) region were US$1.29bn, an increase of 2pc in US dollars and a decrease of 13pc in local currency, reflecting the strength of the euro and the British pound.

Outsourcing accounted for US$828m of net revenues in the second quarter, an increase of 33pc over net revenues from outsourcing in the same quarter last year. Outsourcing now represents 29pc of total net revenues and continues to be an area that the company is targeting for growth.

Consulting revenues were approximately US$2bn, representing a decline of 15pc from the second quarter last fiscal year.

Chief executive Joe Forehand: “Our assumption for the rest of the year is that the market will not hand us much in terms of demand improvement.”

As a result of workforce actions taken in the third quarter of fiscal year 2003, the company expects to incur approximately US$60m in severance costs net of payroll savings during the third quarter and anticipates that it will have approximately US$60m in payroll savings in the fourth quarter.

Accenture expects earnings per share for the third quarter, ending 31 May, 2003, to be in the range of US$0.24 to US$0.26 and net revenues for the quarter to be in a range of negative 2pc. Accenture expects earnings per share for the full fiscal year to be in a range of US$0.98 to US$1.05 and continues to target fiscal year earnings per share of US$1.05.

The company continues to expect net revenue growth of 0-2pc for the full fiscal year 2003.

By Suzanne Byrne