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Accenture (ACN) Misses on Q3 Earnings, Tweaks Fiscal '22 View
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Accenture plc (ACN - Free Report) reported mixed third-quarter fiscal 2022 results, wherein its earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
Earnings of $2.79 per share missed the consensus estimate by 1.8% but improved 16.3% year over year. The bottom line benefited from higher revenues and operating results, lower share count, lower interest and other non-operating expenses, partially offset by the loss on the disposition of the company’s business in Russia, higher effective tax rate and higher non-controlling interest.
Revenues of $16.16 billion beat the consensus mark by 0.7% and increased 22% year over year on a reported basis and 27% in terms of local currency. Revenues exceeded the guided range of $15.7-$16.15 billion.
During the reported quarter, the company witnessed continued solid, broad-based demand across all of its markets, services and industries.
Over the past year, shares of Accenture have declined 3.5% compared with 1.1% loss of the industry it belongs to and 12.4% loss of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
Revenues in Detail
Based on the type of work, Consulting revenues of $9.03 billion increased 24% year over year on a reported basis and 30% in terms of local currency. Outsourcing revenues of $7.13 billion increased 19% year over year on a reported basis and 23% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $3.43 billion improved 27% year over year on a reported basis and 31% in terms of local currency. Financial Services revenues of $3.08 billion increased 19% year over year on a reported basis and 24% in terms of local currency. Health & Public Service revenues of $2.92 billion increased 16% year over year on a reported basis and 19% in terms of local currency. Products revenues of $4.60 billion grew 25% year over year in U.S. dollars and 31% in terms of local currency. Resources revenues of $2.13 billion increased 21% year over year on a reported basis and 26% in terms of local currency.
Geographically, revenues of $7.61 billion from North America increased 23% year over year on a reported basis and in terms of local currency. Revenues of $5.35 billion from Europe increased 20% on a reported basis and 30% in terms of local currency. Revenues of $3.19 billion from Growth Markets increased 22% year over year on a reported basis and 30% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $17 billion in the quarter, up 10% year over year on a reported basis and 15% in terms of local currency. Consulting bookings totaled $9.1 billion and Outsourcing bookings summed $7.8 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for third-quarter fiscal 2021 came in at 32.9% compared with 33.2% in the year-ago period. Operating income grew 23% year over year to $2.60 billion. Operating margin of 16.1% rose from 16% in the year-ago quarter.
Accenture exited third-quarter fiscal 2022 with total cash and cash equivalent balance of $5.64 billion compared with $8.17 billion at the end of the prior quarter. Long-term debt was $55.8 million compared with $53.5 million at the end of the prior quarter.
Cash provided by operating activities was $3.06 billion for the reported quarter. Free cash flow came in at $2.87billion.
Dividend Payout
On May 13, 2022, the company paid out a quarterly cash dividend of 97 cents per share to shareholders of record at the close of business on Apr 14, 2022. These cash dividend payouts totaled $614 million.
Accenture announced another quarterly cash dividend of 97 cents per share, to be paid out on Aug 15, 2022, to shareholders of record at the close of business on Jul 14, 2022.
Share Repurchases
During third-quarter fiscal 2022, Accenture repurchased 3.1 million shares for $972 million. The company had approximately 633 million total shares outstanding as of May 31, 2022.
Guidance
For fourth-quarter fiscal 2022, Accenture expects revenues of $15-$15.5 billion. The Zacks Consensus Estimate of $15.95 billion lies above the guidance.
Accenture updated its guidance for fiscal 2022. Revenues are now expected to register 25.5-26.5% growth compared with the prior growth rate of 24-26%.
The company now expects fiscal 2022 EPS in the range of $10.61-$10.70 compared with the prior guidance of $10.61-$10.81. The current Zacks Consensus Estimate of $10.80 lies above the updated guidance.
Operating cash flow is anticipated in the range of $8.7-$9.2 billion. Free cash flow is expected between $8.0 billion and $8.5 billion. The company expects to return nearly $6.5 billion in cash to shareholders through dividend payments and share repurchases.
Equifax’s adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. The reported figure exceeded the guided range of $2.08-$2.18.
Equifax’s revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis. The reported figure exceeded the guided range of $1.32-$1.34 billion.
Waste Management (WM - Free Report) reported solid first-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Waste Management’s adjusted earnings per share of $1.29 beat the Zacks Consensus Estimate by 15.2% and improved 21.7% year over year.
Waste Management’s total revenues of $4.66 billion beat the consensus estimate by 4.6% and increased 13.4% year over year.
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Accenture (ACN) Misses on Q3 Earnings, Tweaks Fiscal '22 View
Accenture plc (ACN - Free Report) reported mixed third-quarter fiscal 2022 results, wherein its earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
Earnings of $2.79 per share missed the consensus estimate by 1.8% but improved 16.3% year over year. The bottom line benefited from higher revenues and operating results, lower share count, lower interest and other non-operating expenses, partially offset by the loss on the disposition of the company’s business in Russia, higher effective tax rate and higher non-controlling interest.
Revenues of $16.16 billion beat the consensus mark by 0.7% and increased 22% year over year on a reported basis and 27% in terms of local currency. Revenues exceeded the guided range of $15.7-$16.15 billion.
During the reported quarter, the company witnessed continued solid, broad-based demand across all of its markets, services and industries.
Over the past year, shares of Accenture have declined 3.5% compared with 1.1% loss of the industry it belongs to and 12.4% loss of the Zacks S&P 500 composite.
Image Source: Zacks Investment Research
Revenues in Detail
Based on the type of work, Consulting revenues of $9.03 billion increased 24% year over year on a reported basis and 30% in terms of local currency. Outsourcing revenues of $7.13 billion increased 19% year over year on a reported basis and 23% in terms of local currency.
Segment-wise, Communications, Media & Technology revenues of $3.43 billion improved 27% year over year on a reported basis and 31% in terms of local currency. Financial Services revenues of $3.08 billion increased 19% year over year on a reported basis and 24% in terms of local currency. Health & Public Service revenues of $2.92 billion increased 16% year over year on a reported basis and 19% in terms of local currency. Products revenues of $4.60 billion grew 25% year over year in U.S. dollars and 31% in terms of local currency. Resources revenues of $2.13 billion increased 21% year over year on a reported basis and 26% in terms of local currency.
Geographically, revenues of $7.61 billion from North America increased 23% year over year on a reported basis and in terms of local currency. Revenues of $5.35 billion from Europe increased 20% on a reported basis and 30% in terms of local currency. Revenues of $3.19 billion from Growth Markets increased 22% year over year on a reported basis and 30% in terms of local currency.
Booking Trends
Accenture reported new bookings worth $17 billion in the quarter, up 10% year over year on a reported basis and 15% in terms of local currency. Consulting bookings totaled $9.1 billion and Outsourcing bookings summed $7.8 billion.
Operating Results
Gross margin (gross profit as a percentage of net revenues) for third-quarter fiscal 2021 came in at 32.9% compared with 33.2% in the year-ago period. Operating income grew 23% year over year to $2.60 billion. Operating margin of 16.1% rose from 16% in the year-ago quarter.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Balance Sheet & Cash Flow
Accenture exited third-quarter fiscal 2022 with total cash and cash equivalent balance of $5.64 billion compared with $8.17 billion at the end of the prior quarter. Long-term debt was $55.8 million compared with $53.5 million at the end of the prior quarter.
Cash provided by operating activities was $3.06 billion for the reported quarter. Free cash flow came in at $2.87billion.
Dividend Payout
On May 13, 2022, the company paid out a quarterly cash dividend of 97 cents per share to shareholders of record at the close of business on Apr 14, 2022. These cash dividend payouts totaled $614 million.
Accenture announced another quarterly cash dividend of 97 cents per share, to be paid out on Aug 15, 2022, to shareholders of record at the close of business on Jul 14, 2022.
Share Repurchases
During third-quarter fiscal 2022, Accenture repurchased 3.1 million shares for $972 million. The company had approximately 633 million total shares outstanding as of May 31, 2022.
Guidance
For fourth-quarter fiscal 2022, Accenture expects revenues of $15-$15.5 billion. The Zacks Consensus Estimate of $15.95 billion lies above the guidance.
Accenture updated its guidance for fiscal 2022. Revenues are now expected to register 25.5-26.5% growth compared with the prior growth rate of 24-26%.
The company now expects fiscal 2022 EPS in the range of $10.61-$10.70 compared
with the prior guidance of $10.61-$10.81. The current Zacks Consensus Estimate of $10.80 lies above the updated guidance.
Operating cash flow is anticipated in the range of $8.7-$9.2 billion. Free cash flow is expected between $8.0 billion and $8.5 billion. The company expects to return nearly $6.5 billion in cash to shareholders through dividend payments and share repurchases.
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
Omnicom Group (OMC - Free Report) reported impressive first-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Omnicom’s earnings of $1.39 per share beat the consensus mark by 8.6% and increased 4.5% year over year, driven by strong margin performance.
Omnicom’s total revenues of $3.4 billion surpassed the consensus estimate by 5.4% but declined slightly year over year.
Equifax (EFX - Free Report) reported better-than-expected first-quarter 2022 results.
Equifax’s adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. The reported figure exceeded the guided range of $2.08-$2.18.
Equifax’s revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis. The reported figure exceeded the guided range of $1.32-$1.34 billion.
Waste Management (WM - Free Report) reported solid first-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Waste Management’s adjusted earnings per share of $1.29 beat the Zacks Consensus Estimate by 15.2% and improved 21.7% year over year.
Waste Management’s total revenues of $4.66 billion beat the consensus estimate by 4.6% and increased 13.4% year over year.