Accenture Q3 profit up 1% on European, Asian sales

Accenture Q3 profit up 1% on European, Asian sales
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First Published: Sat, Jun 30 2007. 12 15 AM IST
Updated: Sat, Jun 30 2007. 12 15 AM IST
Atlanta: Accenture Ltd, the world’s second biggest technology consulting firm, said third-quarter net income rose about 1% as sales in Asia and Europe climbed. The company also raised its earnings forecast for the year.
Profit advanced to $345.4 million (Rs1,416.14 crore), or 54 cents a share, in the quarter ended 31 May, from $342.3 million, or 56 cents, a year earlier, when the company had a gain of 6 cents a share from a drop in reorganization costs. Sales before reimbursements from clients surged 15% to $5.08 billion, Accenture said.
Revenue from Europe, West Asia and Africa climbed 19% to $2.47 billion, while Asian sales climbed 44% to $457 million. US revenue increased 6.9% to $2.16 billion.
Communications, technology and financial services clients in Australia and Japan helped bolster Asian growth, chief operating officer Stephen Rohleder said in a conference call.
Accenture will increase its staff in India to 35,000 by the end of August, from about 400 people five years ago.
“It’s important to establish a dominant market position in India, not only to leverage supply there, but to serve local companies and the India branches of our global clients,” chief executive officer William Green said in an interview.
Accenture decided in March to double its management consulting staff worldwide, seeking more clients in Europe and countries such as India, China and Brazil.
The company will also spend $250 million in the next three years upgrading data centres and recruiting and training staff.
“The global diversity of our network continues to be a competitive advantage for us,” Rohleder said.
Accenture had 158,000 employees at the end of the quarter, a 13% increase from the end of the company’s last fiscal year.
Accenture said profit for the year will be $1.94 to $1.96 a share, compared with an earlier range of $1.88 to $1.93.
The average analyst estimate for net income in a Bloomberg survey is $1.89 a share, or $1.93 excluding items.
The company also predicted that fourth-quarter sales will be $4.8 billion to $5 billion, exceeding the $4.72 billion average in a Bloomberg survey.
Accenture booked $3.5 billion in new consultancy agreements for the last quarter, representing more than half of the company’s total new business. Consulting net revenues were $3.08 billion, representing a growth of 15% over last year.
“The quarter was strong, particularly in consulting,” said JPMorgan Securities Inc. analyst Tien-Tsin Huang.
“The results suggest Accenture is taking market share from” companies such as larger rival IBM Corp. and BearingPoint Inc.
The third-quarter results compared with analysts’ estimates of profit of 55 cents a share and revenue of $5.01 billion, according to a Bloomberg survey.
The company had forecast sales of $4.9 billion to $5.1 billion for the period.
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First Published: Sat, Jun 30 2007. 12 15 AM IST