IT services provider Accenture exceeded net revenue and earnings expectations for its 2003 third fiscal quarter, as the company, whose core business is consulting, continued to expand its outsourcing business.
Net income for the quarter, ended May 31, was $132.1 million, or $0.28 per share, compared with net income of $114.5 million, or $0.27 per share, in 2002's third fiscal quarter. The consensus forecast from analysts polled by Thomson First Call was for $0.25 per share.
Net revenue for the quarter came in at US$3.04 billion, up 2 percent in U.S. dollars and down 5 percent in local currency, compared with 2002's third fiscal quarter, the company said Tuesday morning. Net revenue consensus expectation was $2.95 billion.
Accenture's bottom line was helped by a tax rate reduction, which cut provision for taxes by $21 million, or $0.02 per share. Accenture is based in Hamilton, Bermuda, and pays local taxes in the 47 countries in which it operates, a spokesman said Tuesday.
Accenture's outsourcing business generated $944 million of net revenue, up 35 percent in U.S. dollars and 28 percent in local currency over 2002's third fiscal quarter. The outsourcing net revenue represented 31 percent of all net revenue, up from 23 percent in 2002's third fiscal quarter. This is consistent with the company's strategy to expand its outsourcing business.
Accenture's core consulting business generated net revenue of about $2 billion, down 8 percent in U.S. dollars and 16 percent in local currency compared with 2002's third fiscal quarter. Spending on IT consulting in general has been weak over the past two years, as chief information officers grapple with reduced IT budgets.
For the fourth quarter, which ends Aug. 31, Accenture expects earnings per share between $0.21 and $0.25 and net revenue to grow between 5 percent and 10 percent compared with 2002's fourth quarter, an Accenture spokesman said.
Accenture also has notified authorities about a possible violation of the U.S. Foreign Corrupt Practices Act (FCPA) in its Middle East division, the spokesman said. If true, the violation isn't expected to have a material impact on Accenture's financial performance, he said. The FCPA, passed in 1977, prohibits bribing foreign officials. It is enforced by the U.S. Department of Justice and the U.S. Securities and Exchange Commission (SEC).
Accenture issued its third quarter report before the financial markets opened in New York. The company's stock (ACN) was up 6.10 percent to $20 in mid-day trading in the New York Stock Exchange.