Accenture Guidance Downbeat, Share Tumble in Afterhours (ACN)
Accenture Plc (NYSE: ACN) said late on Thursday that its fiscal third-quarter earnings rose 18%, driven by higher revenue from heath, public and financial division; nonetheless, shares plunged almost 7% in afterhours trading as the IT consulting firm slashed its full-year revenue guidance. Revenue from the current quarter also fell short of analysts’ estimation.
For the full fiscal year, Accenture now expects revenue to grow by 3% to 4% down from its earlier projections of 5% to 8%. For the fourth quarter, the company anticipates revenue to be in the range of $6.7 billion to $7 billion while analysts polled by Thomson Reuters had expected $7.36 billion.
The Dublin, Ireland-based company, which competes with tech giants such as Hewlett-Packard Co. (NYSE: HPQ) and International Business Machines Corp. (NYSE: IBM), has mainly delivered strong quarterly results in last two years as revenue from outsourcing business grew sharply.
Earlier in May, the enterprise IT consulting firm acquired Acquity Group Ltd. in a cash deal valued at $316 million, a move which allow gaining traction in digital marketing sphere.
For the fiscal third quarter ended May 31, Accenture reported net income of $810.3 million or $1.21 a share compared to a profit of $689.2 million or $1.03 a share, in the same quarter of last year.
Excluding onetime items, the company earned $1.14 a share, a penny higher than analysts’ consensus estimate.
Revenue edged up 0.6% to $7.2 billion or 3% after excluding the impact of foreign currency fluctuation. The Company had provided revenue guidance of $7.25 billion to $7.5 billion.
Gross margin improved to 33.9% from 33.1%, in the same period of last year.
Segment wise, revenue fell 5.3% from the media, communications and technology business, it rose 4.8% from the financial services while it climbed 9.4% at heath and public division.
Revenue from products edged up 1.3% while from resources fell 5.4%.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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