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Earnings of $2.03 per share beat the consensus estimate by 6.8% and improved year over year. The bottom line benefited from higher revenues and operating numbers, and lower share count, partially offset by higher effective tax rate, lower non-operating income and higher income attributable to non-controlling interests.
Revenues of $12.09 billion beat the consensus mark by 2.1% and increased 8% year over year on a reported basis and 5% in terms of local currency. Revenues exceeded the guided range of $11.55-$11.95 billion.
Over the past six months, shares of Accenture have gained 13%, compared with 18.6% increase of the industry it belongs to and 21.9% increase of the Zacks S&P 500 composite.
Revenues in Detail
Based on the type of work, Consulting revenues of $6.44 billion increased 4% year over year on a reported basis and 1% in terms of local currency. Outsourcing revenues of $5.65 billion increased 14% year over year on a reported basis and 11% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $2.48 billion improved 11% year over year on a reported basis and 9% in terms of local currency. Financial Services revenues of $2.38 billion increased 14% year over year on a reported basis and 10% in terms of local currency.
Health & Public Service revenues of $2.26 billion increased 16% year over year on a reported basis and 14% in terms of local currency. Products revenues of $3.34 billion grew 6% year over year in U.S. dollars and 2% in terms of local currency. Resources revenues of $1.63 billion decreased 4% year over year on a reported basis and 7% in terms of local currency.
Geographically, revenues of $5.63 billion from North Americas increased 7% year over year on a reported basis as well as in terms of local currency. Revenues of $4.03 billion from Europe increased 11% on a reported basis and 3% in terms of local currency. Revenues of $2.43 billion from Growth Markets increased 8% year over year on a reported basis and 6% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $16 billion, up 13% year over year. Consulting bookings and Outsourcing bookings totaled $8.0 billion each.
Gross margin (gross profit as a percentage of net revenues) for the second quarter of fiscal 2021 decreased 50 basis points (bps) to 29.7%. Operating income was $1.65 billion, up 11% year over year. Operating margin in the reported quarter expanded 30 bps to 13.7%.
Balance Sheet & Cash Flow
Accenture exited second-quarter fiscal 2021 with total cash and cash equivalents balance of $9.17 billion compared with $8.59 billion at the end of the prior quarter. Long-term debt was $59.3 million compared with $59.8 million at the end of the prior quarter.
Cash provided by operating activities crossed $2.53 billion in the reported quarter. Free cash flow came in at $2.44 billion.
Dividend Payout
On Feb 12, 2021, the company paid out a quarterly cash dividend of 88 cents per share to shareholders of record at the close of business on Jan 14, 2021. These cash dividend payouts totaled $561 million.
The company has declared another quarterly cash dividend of 88 cents per share, to be paid out on May 14, 2021 for shareholders of record at the close of business on Apr 15, 2021.
Share Repurchases
During second-quarter fiscal 2021, Accenture repurchased 4.6 million shares for $1.18 billion. The company had approximately 636 million total shares outstanding as of Feb 28, 2021.
Guidance
Third-Quarter Fiscal 2021
For third-quarter fiscal 2021, Accenture expects revenues of $12.55-$12.95 billion. The expectation is inclusive of a positive foreign-exchange impact of 4.5%.
Fiscal 2021
Accenture has raised its guidance for fiscal year 2021. Revenues are now expected to register 6.5-8.5% growth in terms of local currency compared with the prior growth rate of 4-6%.
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 $7.65-$8.15 billion compared with the prior guidance of $6.65-$7.15 billion. Free cash flow is now expected between $7.0 billion and $7.5 billion, compared with the prior guidance of $6.0 billion to $6.5 billion.
The company expects adjusted EPS in the range of $8.32-$8.50 compared with the prior-guided range of $8.02-$8.25. The current Zacks Consensus Estimate of $8.24 lies below the updated guidance.
Operating margin for the fiscal year is expected to be between 15.0% and 15.1%, compared with the prior guidance of 14.8% to 15.0%. Annual effective tax rate is anticipated in the range of 23%-25%.
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s(ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
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Accenture (ACN) Beats on Q2 Earnings & Revenues, 2021 View Up
Accenture plc (ACN - Free Report) reported solid second-quarter fiscal 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Earnings of $2.03 per share beat the consensus estimate by 6.8% and improved year over year. The bottom line benefited from higher revenues and operating numbers, and lower share count, partially offset by higher effective tax rate, lower non-operating income and higher income attributable to non-controlling interests.
Revenues of $12.09 billion beat the consensus mark by 2.1% and increased 8% year over year on a reported basis and 5% in terms of local currency. Revenues exceeded the guided range of $11.55-$11.95 billion.
Over the past six months, shares of Accenture have gained 13%, compared with 18.6% increase of the industry it belongs to and 21.9% increase of the Zacks S&P 500 composite.
Revenues in Detail
Based on the type of work, Consulting revenues of $6.44 billion increased 4% year over year on a reported basis and 1% in terms of local currency. Outsourcing revenues of $5.65 billion increased 14% year over year on a reported basis and 11% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $2.48 billion improved 11% year over year on a reported basis and 9% in terms of local currency. Financial Services revenues of $2.38 billion increased 14% year over year on a reported basis and 10% in terms of local currency.
Health & Public Service revenues of $2.26 billion increased 16% year over year on a reported basis and 14% in terms of local currency. Products revenues of $3.34 billion grew 6% year over year in U.S. dollars and 2% in terms of local currency. Resources revenues of $1.63 billion decreased 4% year over year on a reported basis and 7% in terms of local currency.
Geographically, revenues of $5.63 billion from North Americas increased 7% year over year on a reported basis as well as in terms of local currency. Revenues of $4.03 billion from Europe increased 11% on a reported basis and 3% in terms of local currency. Revenues of $2.43 billion from Growth Markets increased 8% year over year on a reported basis and 6% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $16 billion, up 13% year over year. Consulting bookings and Outsourcing bookings totaled $8.0 billion each.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Operating Results
Gross margin (gross profit as a percentage of net revenues) for the second quarter of fiscal 2021 decreased 50 basis points (bps) to 29.7%. Operating income was $1.65 billion, up 11% year over year. Operating margin in the reported quarter expanded 30 bps to 13.7%.
Balance Sheet & Cash Flow
Accenture exited second-quarter fiscal 2021 with total cash and cash equivalents balance of $9.17 billion compared with $8.59 billion at the end of the prior quarter. Long-term debt was $59.3 million compared with $59.8 million at the end of the prior quarter.
Cash provided by operating activities crossed $2.53 billion in the reported quarter. Free cash flow came in at $2.44 billion.
Dividend Payout
On Feb 12, 2021, the company paid out a quarterly cash dividend of 88 cents per share to shareholders of record at the close of business on Jan 14, 2021. These cash dividend payouts totaled $561 million.
The company has declared another quarterly cash dividend of 88 cents per share, to be paid out on May 14, 2021 for shareholders of record at the close of business on Apr 15, 2021.
Share Repurchases
During second-quarter fiscal 2021, Accenture repurchased 4.6 million shares for $1.18 billion. The company had approximately 636 million total shares outstanding as of Feb 28, 2021.
Guidance
Third-Quarter Fiscal 2021
For third-quarter fiscal 2021, Accenture expects revenues of $12.55-$12.95 billion. The expectation is inclusive of a positive foreign-exchange impact of 4.5%.
Fiscal 2021
Accenture has raised its guidance for fiscal year 2021. Revenues are now expected to register 6.5-8.5% growth in terms of local currency compared with the prior growth rate of 4-6%.
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 $7.65-$8.15 billion compared with the prior guidance of $6.65-$7.15 billion. Free cash flow is now expected between $7.0 billion and $7.5 billion, compared with the prior guidance of $6.0 billion to $6.5 billion.
The company expects adjusted EPS in the range of $8.32-$8.50 compared with the prior-guided range of $8.02-$8.25. The current Zacks Consensus Estimate of $8.24 lies below the updated guidance.
Operating margin for the fiscal year is expected to be between 15.0% and 15.1%, compared with the prior guidance of 14.8% to 15.0%. 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 Other Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s(ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
AccessZacks Top 10 Stocks for 2021 today >>