Accenture plc

ACN


reported impressive first-quarter fiscal 2023 results, wherein both earnings & revenues beat the respective Zacks Consensus Estimate.

Earnings of $3.08 per share surpassed the Zacks Consensus Estimate by 5.8% and improved 10.8% from the year-ago fiscal quarter’s reading. The bottom line benefited from higher revenues and operating results, lower share count, lower effective tax-rate and increased non-operating income.

Revenues of $15.75 billion also beat the Zacks Consensus Estimate by 1.1% and increased 5.2% from the year-ago fiscal quarter’s tally on a reported basis and 15% in terms of local currency. Revenues benefitted from increase in both Consulting revenues and Managed Services (previously called as Outsourcing) revenues.

Revenues in Detail

Based on the type of work, Consulting revenues of $8.44 billion increased 1% from the year-ago fiscal quarter’s reading on a reported basis and 10% in terms of local currency. Managed Services revenues of $7.30 billion increased 11% from the year-ago fiscal quarter’s number on a reported basis and 20% in terms of local currency.

Segment-wise, Communications, Media & Technology revenues of $2.98 billion improved 3% from the year-ago fiscal quarter’s actuals on a reported basis and 11% in terms of local currency. Financial Services revenues of $2.96 billion increased 2% from the year-ago fiscal quarter’s reading on a reported basis and 13% on local currency basis.

Health & Public Service revenues of $3 billion increased 10% from the year-ago fiscal quarter’s reading on a reported basis and 15% in terms of local currency. Products revenues of $4.67 billion grew 4% from the year-ago fiscal quarter’s number in U.S. dollars and 15% in terms of local currency. Resources revenues of $2.14 billion increased 10% from the year-ago fiscal quarter’s level on a reported basis and 21% in local currency.

Geographically, revenues of $7.62 billion from North America increased 10% from the year-ago fiscal quarter’s figure on a reported basis and 11% in terms of local currency. Revenues of $5.07 billion from Europe decreased 0.5% on a reported basis but increased 17% in terms of local currency. Revenues of $3.05 billion from Growth Markets increased 3% year over year on a reported basis and 19% in terms of local currency.

Booking Trends

Accenture reported new bookings worth $16.2 billion in the fiscal first quarter, down 3% from the year-ago fiscal quarter’s reading on a reported basis but up 6% in terms of local currency. Consulting bookings totaled $8.11 billion and Managed Services bookings summed $8.11 billion.

Operating Results

Gross margin (gross profit as a percentage of net revenues) for first-quarter fiscal 2023 came in at 32.9%, flat in comparison to the year-ago fiscal period. Operating income surged 7% from the year-ago fiscal quarter’s reading to $2.59 billion. Operating margin of 16.5% rose from 16.3% in the year-ago fiscal quarter.

Balance Sheet & Cash Flow

Accenture exited first-quarter fiscal 2022  with cash and cash equivalents of $5.89 billion compared with $7.89 billion at the end of the prior fiscal quarter . Long-term debt was $45.1 million compared with $45.9 million at the end of the prior fiscal quarter .

Cash provided by operating activities was $4.95 billion for the reported fiscal quarter. Free cash flow came in at $397 million.

Share Repurchases

During first-quarter fiscal 2023, Accenture repurchased 5.2 million shares for $1.4 billion.

Guidance

For second-quarter fiscal 2023, Accenture expects revenues in the range of $15.2-$15.75 billion. The midpoint of the guided range ($15.475 billion) lies below the Zacks Consensus Estimate of $15.66 billion.

For fiscal 2023, revenues are expected to register 8-11% growth in local currency.

Accenture now expects fiscal 2023 EPS in the range of $11.20-$11.52 (prior guidance: $11.09-$11.41). The midpoint of the guided range ($11.36)  lies above the Zacks Consensus Estimate of $11.34 billion .

Accenture still expects its operating margin for the full fiscal year in the range of 15.3-15.5%.

Operating cash flow is still anticipated in the range of $8.5-$9.0 billion. Free cash flow is expected between $7.7 billion and $8.2 billion. ACN expects to return $7.1 billion of cash to its shareholders through

dividend payments

and share repurchases.

Currently, Accenture carries a Zacks Rank #2 (Buy). You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

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Earnings of $1.77 per share beat the Zacks Consensus Estimate by 7.9% and increased 7.3% year over year, driven by a solid margin performance. Total revenues of $3.4 billion surpassed the Zacks Consensus Estimate by 3% and increased slightly on a year-over-year basis.

E

quifax Inc.

EFX


reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the Zacks Consensus Estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis.

The Interpublic Group of Companies, Inc.

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reported better-than-expected third-quarter 2022 results.

Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been flat over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.

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