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Earnings of $2.17 per share beat the consensus estimate by 6.4% and improved year over year. The bottom line benefited from higher revenues and operating numbers, lower effective tax rate and lower share count.
Net revenues of $11.76 billion beat the consensus mark by 3.4% and increased 4% year over year on a reported basis and 2% in terms of local currency. Net revenues exceeded the guided range of $11.15-$11.55 billion.
So far this year, shares of Accenture have gained 17.2%, compared with 17.7% increase of the industry it belongs to and 14.9% increase of the Zacks S&P 500 composite.
Revenues in Detail
On the basis of the type of work, Consulting revenues of $6.33 billion decreased 1% year over year on a reported basis and 2% in terms of local currency. Outsourcing revenues of $5.43 billion increased 9% year over year on a reported basis and 8% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $2.33 billion improved 4% year over year on a reported basis and 3% in terms of local currency. Financial Services revenues of $2.35 billion increased 7% year over year on a reported basis and 5% in terms of local currency. Health & Public Service revenues of $2.21 billion increased 12% year over year on a reported basis and 11% in terms of local currency. Products revenues of $3.21 billion were flat in U.S. dollars and down 3% in terms of local currency. Resources revenues of $1.66 billion decreased 4% year over year on a reported basis and 5% in terms of local currency.
Geographically, revenues of $5.48 billion from North Americas increased 4% year over year on a reported basis as well as in terms of local currency. Revenues of $3.97 billion from Europe increased 5% on a reported basis but declined 1% in terms of local currency. Revenues from Growth Markets of $2.31 billion increased 1% year over year on a reported basis and 3% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $12.9 billion, up 25% year over year. Consulting bookings and Outsourcing bookings totaled $6.6 billion and $6.3 billion, respectively.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for the first quarter of fiscal 2021 increased 100 basis points (bps) to 33.1%. Operating income was $1.89 billion, up 6.8% year over year. Operating margin in the reported quarter expanded 50 bps to 16.1%.
Accenture exited first-quarter fiscal 2021 with total cash and cash equivalents balance of $8.59 billion compared with $8.42 billion at the end of the prior quarter. Long-term debt was $59.8 million compared with $54.1 million at the end of the prior quarter.
Cash provided by operating activities crossed $1.60 billion in the reported quarter. Free cash flow came in at $1.51 billion.
Dividend Payout
On Nov 13, 2020, the company paid out a quarterly cash dividend of 88 cents per share to shareholders of record at the close of business on Oct 13, 2020. These cash dividend payouts totaled $558 million.
The company has declared another quarterly cash dividend of 88 cents per share, to be paid out on Feb 12, 2021 for shareholders of record at the close of business on Jan 14, 2021.
Share Repurchases
In line with the policy of returning cash to its shareholders, Accenture repurchased 3.3 million shares for $769 million in the fiscal first-quarter 2021. The company had approximately 634 million total shares outstanding as of Nov 30, 2020.
Guidance
Second-Quarter Fiscal 2021
For second-quarter fiscal 2021, Accenture expects revenues of $11.55-$11.95 billion. The assumption is inclusive of a positive foreign-exchange impact of 3%.
Fiscal 2021
Accenture has raised its guidance for fiscal year 2021. Revenues are now expected to register 4-6% growth in terms of local currency compared with the prior growth rate of 2-5%.
The company now expects positive foreign-exchange impact of 3% on its results in U.S. dollars compared with the prior foreign-exchange assumption of 2%.
Operating cash flow is now anticipated in the range of $6.65-$7.15 billion compared with the prior guidance of $6.35-$6.85 billion. Free cash flow is now expected between $6.0 billion and $6.5 billion compared with the prior guidance of $5.7 billion to $6.2 billion.
The company expects adjusted EPS in the range of $8.02-$8.25. The current Zacks Consensus Estimate of $8.04 lies within the guidance.
Operating margin for the fiscal year is expected to be between 14.8% and 15%, indicating an expansion of 10-30 bps from fiscal 2020. Annual effective tax rate is anticipated in the range of 23%-25%.
Equifax Inc. (EFX - Free Report) reported third-quarter 2020 adjusted earnings of $1.87 per share that beat the Zacks Consensus Estimate by 16.2% and improved 26.4% on a year-over-year basis. Revenues of $1.07 billion outpaced the consensus estimate by 5.9% and improved 22% year over year.
ManpowerGroup Inc. (MAN - Free Report) reported third-quarter 2020 earnings of $1.12 per share, beating the consensus mark by 90.5% but declining more than 37.5% year over year. Revenues of $4.58 billion surpassed the consensus mark by 8.7% but declined 12.7% year over year.
IHS Markit Ltd. recorded third-quarter fiscal 2020 adjusted earnings per share of 77 cents that surpassed the consensus estimate by 11.6% and increased 15% on a year-over-year basis. Total revenues came in at $1.07 billion, marginally beating the consensus mark but declining 4% from the year-ago quarter.
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Accenture's (ACN) Q1 Earnings & Revenues Top, 2021 View Up
Accenture plc (ACN - Free Report) reported solid first-quarter fiscal 2021 results wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Earnings of $2.17 per share beat the consensus estimate by 6.4% and improved year over year. The bottom line benefited from higher revenues and operating numbers, lower effective tax rate and lower share count.
Net revenues of $11.76 billion beat the consensus mark by 3.4% and increased 4% year over year on a reported basis and 2% in terms of local currency. Net revenues exceeded the guided range of $11.15-$11.55 billion.
So far this year, shares of Accenture have gained 17.2%, compared with 17.7% increase of the industry it belongs to and 14.9% increase of the Zacks S&P 500 composite.
Revenues in Detail
On the basis of the type of work, Consulting revenues of $6.33 billion decreased 1% year over year on a reported basis and 2% in terms of local currency. Outsourcing revenues of $5.43 billion increased 9% year over year on a reported basis and 8% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $2.33 billion improved 4% year over year on a reported basis and 3% in terms of local currency. Financial Services revenues of $2.35 billion increased 7% year over year on a reported basis and 5% in terms of local currency. Health & Public Service revenues of $2.21 billion increased 12% year over year on a reported basis and 11% in terms of local currency. Products revenues of $3.21 billion were flat in U.S. dollars and down 3% in terms of local currency. Resources revenues of $1.66 billion decreased 4% year over year on a reported basis and 5% in terms of local currency.
Geographically, revenues of $5.48 billion from North Americas increased 4% year over year on a reported basis as well as in terms of local currency. Revenues of $3.97 billion from Europe increased 5% on a reported basis but declined 1% in terms of local currency. Revenues from Growth Markets of $2.31 billion increased 1% year over year on a reported basis and 3% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $12.9 billion, up 25% year over year. Consulting bookings and Outsourcing bookings totaled $6.6 billion and $6.3 billion, respectively.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for the first quarter of fiscal 2021 increased 100 basis points (bps) to 33.1%. Operating income was $1.89 billion, up 6.8% year over year. Operating margin in the reported quarter expanded 50 bps to 16.1%.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Balance Sheet & Cash Flow
Accenture exited first-quarter fiscal 2021 with total cash and cash equivalents balance of $8.59 billion compared with $8.42 billion at the end of the prior quarter. Long-term debt was $59.8 million compared with $54.1 million at the end of the prior quarter.
Cash provided by operating activities crossed $1.60 billion in the reported quarter. Free cash flow came in at $1.51 billion.
Dividend Payout
On Nov 13, 2020, the company paid out a quarterly cash dividend of 88 cents per share to shareholders of record at the close of business on Oct 13, 2020. These cash dividend payouts totaled $558 million.
The company has declared another quarterly cash dividend of 88 cents per share, to be paid out on Feb 12, 2021 for shareholders of record at the close of business on Jan 14, 2021.
Share Repurchases
In line with the policy of returning cash to its shareholders, Accenture repurchased 3.3 million shares for $769 million in the fiscal first-quarter 2021. The company had approximately 634 million total shares outstanding as of Nov 30, 2020.
Guidance
Second-Quarter Fiscal 2021
For second-quarter fiscal 2021, Accenture expects revenues of $11.55-$11.95 billion. The assumption is inclusive of a positive foreign-exchange impact of 3%.
Fiscal 2021
Accenture has raised its guidance for fiscal year 2021. Revenues are now expected to register 4-6% growth in terms of local currency compared with the prior growth rate of 2-5%.
The company now expects positive foreign-exchange impact of 3% on its results in U.S. dollars compared with the prior foreign-exchange assumption of 2%.
Operating cash flow is now anticipated in the range of $6.65-$7.15 billion compared with the prior guidance of $6.35-$6.85 billion. Free cash flow is now expected between $6.0 billion and $6.5 billion compared with the prior guidance of $5.7 billion to $6.2 billion.
The company expects adjusted EPS in the range of $8.02-$8.25. The current Zacks Consensus Estimate of $8.04 lies within the guidance.
Operating margin for the fiscal year is expected to be between 14.8% and 15%, indicating an expansion of 10-30 bps from fiscal 2020. Annual effective tax rate is anticipated in the range of 23%-25%.
Currently, Accenture carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some other Services Companies
Equifax Inc. (EFX - Free Report) reported third-quarter 2020 adjusted earnings of $1.87 per share that beat the Zacks Consensus Estimate by 16.2% and improved 26.4% on a year-over-year basis. Revenues of $1.07 billion outpaced the consensus estimate by 5.9% and improved 22% year over year.
ManpowerGroup Inc. (MAN - Free Report) reported third-quarter 2020 earnings of $1.12 per share, beating the consensus mark by 90.5% but declining more than 37.5% year over year. Revenues of $4.58 billion surpassed the consensus mark by 8.7% but declined 12.7% year over year.
IHS Markit Ltd. recorded third-quarter fiscal 2020 adjusted earnings per share of 77 cents that surpassed the consensus estimate by 11.6% and increased 15% on a year-over-year basis. Total revenues came in at $1.07 billion, marginally beating the consensus mark but declining 4% from the year-ago quarter.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>