For the third fiscal quarter ended May 31, revenue jumped 15% to $5.08bn, divided between $3.08bn in consulting sales and outsourcing sales of $2bn. Sales in the Americas increased 7% to $2.02bn, but the real story was in the EMEA region, where revenue climbed 19% to $2.07bn, and in Asia Pacific, where business leapt 44% to $317m. CEO Bill Green said the Asia Pacific concentration was mainly in Japan and Austalia, but primarily for local companies in those countries, rather than the local operations of Accenture’s global clients.
Bookings for the quarter hit $6.22bn, with $3.5bn coming from new consulting projects and $2.72bn from outsourcing deals. The company said full-year bookings should be between $22bn and $24bn.
Net income was rather flat at $345.4m compared with $342.3m last year. Earnings per share came in at $0.54, in line with analysts’ estimates, according to Thomson Financial. Wall Street had been expected $5.02bn on the top line.
But Accenture boosted its full year EPS to a range of $1.94 to $1.96 from a previous range of $1.88 to $1.93. And the company expects Q4 revenue between $4.8bn and $5.0bn, ahead of analysts’ expectations of $4.66bn.
Offshore headcount continues to mount at Accenture. Green said the company is on pace to hit its target of 35,000 employees in India by the end of the fiscal year, which puts it squarely in second place behind IBM in terms of Indian numbers among the global services majors. And the Philippines should have roughly 11,000 employees by that time, making it Accenture’s third biggest national workforce, Green added.
The most impressive aspect of the Q3 news was surely the strong demand for consulting, which Green described as having come roaring back. With $3.5bn in new consulting work this quarter, and more than 60% of the top line coming from consulting, Accenture may very well return to the days of their consulting practice leading their business. Green said that the company didn’t expect this kind of consulting/outsourcing mix this early on.
Accenture earlier this month announced a $250m investment in its own technology consulting business, so there’s definitely confidence in the ability to sustain the company’s project work.
Much of our business depends on the confidence of CEOs to invest in their business, Green said. As we read the tea leaves, the key thing that influence decisions in my mind is the need to compete, and that hasn’t gone away.
One area generating tons of buzz in the consulting and systems integration space is service-oriented architecture, but it’s unclear how much work the big services firms are doing in this area. Green said that adoption is still in the early stage .All the big enterprises have at least their toe in the water, some of them up to their knees.
He said Accenture’s SOA engagement were vast in number, but small in size, although he predicts much more delivery in the next 18 months.
Accenture reported after market close on Thursday, but shares ticked up nearly 2% to $43.51 in after-hours trading yesterday.