The financial news for consulting firm Accenture Ltd. was a bright holiday gift Thursday as the company announced that it expects results for its fiscal 2002 first quarter to be higher than analysts' estimates.
Revenues before reimbursements are expected to rise to approximately US$2.99 billion, exceeding analysts' consensus estimates of $2.8 billion, according to the New York-based firm. Operating income is expected to be $405 million to $415 million, exceeding estimates of $379 million.
Final figures for the quarter, which ended Nov. 30, will be reported Jan. 9.
Harry You, Accenture's chief financial officer, said during a conference call today that the expected quarterly revenues would be the company's highest ever.
You said the positive results are due to cost savings implemented earlier this year. In June, Accenture cut about 1,400 jobs through a combination of layoffs and sabbaticals, then cut an additional 1,500 jobs in August. Accenture has about 75,000 employees around the world.
"What still is challenging to predict ... is we still feel we're not out of the woods related to the global economic recovery and particularly the U.S. recovery," You said. "As we look at the pattern so far, as you might expect, we've been trending upward, but it's a bit of a jagged pattern."
Joe W. Forehand, Accenture's chairman and CEO, said in a statement that the strong performance "demonstrates our ongoing ability to provide clients with the services and solutions they require, especially in challenging times like these."
Adam Frisch, an analyst at UBS Warburg LLC in New York, said his company raised its revenue estimates for Accenture last week after being encouraged by the company's continuing year-to-year revenue increases.
"We thought it was going to be a good quarter, but this happens to have the makings of a great quarter," Frisch said. "What you're seeing is the premier vendor in the space ... taking advantage of established relationships and efficiencies," while management is controlling costs to improve the bottom line.
Moshe Katri, an analyst at SG Cowen Securities Corp. in New York, said Accenture's performance is especially surprising because the company is doing well in a "horrible" overall IT market.
The company has been increasing its market share while reducing workforce costs through layoffs and the use of less expensive subcontractors, he said, adding, "They've been pretty creative on that front."