Accenture Profit Rises; Stock Down On Soft Outlook

(RTTNews) - Technology outsourcing and consultancy giant Accenture plc (can), Thursday reported a higher fourth-quarter profit, helped by reduced income tax expense and a four percent rise in revenue. While quarterly earnings came in line with Wall Street estimates, revenue topped expectations.

Looking ahead, the company provided some weak revenue outlook for the first quarter, with none-too-impressive expectations for 2014.

Shares of the company dropped 4 percent in after-hours trade on the New York Stock Exchange.

Accenture's board raised its semi-annual cash dividend by 15 percent to $0.93 per share, and approved $5 billion of additional share repurchase, bringing total authorization to about $7 billion.

Commenting on the quarterly performance, CEO Pierre Nanterme said strong growth was seen in its Health & Public Service segment as well as in Resources and Communications, Media & Technology.

The Dublin, Ireland-based company posted quarterly net revenue of $7.1 billion, up from $6.84 billion last year. On average, 18 analysts polled by Thomson Reuters estimated revenue of $6.9 billion.

Outsourcing net revenue for the quarter grew 6 percent from last year, and Consulting revenue climbed 2 percent.

Among regions, revenue from the Americas increased 8 percent. Modest growth was seen in Europe, Middle East and Africa -- edging up 2 percent, while Asia Pacific was down 7 percent.

Results were helped by a $72 million reduction in income tax expense, on lower reserve additions and increased benefits from prior-year tax liabilities.

As a result, Accenture's net income for the fourth quarter climbed to $671 million or $1.01 per share from $578 million or $0.88 per share a year ago. Nineteen analysts had a consensus earnings estimate of $1.01 per share for the quarter. Analysts' estimates typically exclude one-time items.

For the first quarter, Accenture expects net revenue of $7 billion to $7.3 billion, while analysts expect $7.39 billion.

For fiscal 2014, Accenture estimates earnings of $4.42 to $4.54 per share and net revenue growth of 2 percent to 6 percent in local currency. Analysts currently expect earnings of $4.49 per share on revenue growth of 4.4 percent.

Accenture has been spreading operations to low-cost nations to spur growth.

In July, Accenture was reported to be in talks to buy smaller rival Booz & Co. Such a deal would bolster Accenture's strategy and operations consulting services.

Among other acquisitions this year, the company acquired digital marketing and eCommerce company Acquity Group Ltd., London based global service design consultancy Fjord, and mortgage software provider Mortgage Cadence.

Earlier this month, Accenture agreed to acquire a majority stake in Vivere Brasil Serviços e Soluções S.A., a mortgage-processing technology company, partly owned by BTG Pactual.

Accenture stock closed Thursday at $75.90, down $0.22 or 0.29%, on a volume of 5 million shares. In after hours, the stock dropped $2.93 or 3.86% at $72.94. The stock has traded in a 52-week range of $64.30 to $84.22.