Revenue for the quarter ended August 31 rose 29% to $5.11bn, ahead of analysts’ estimated of $4.9bn, according to Thomson Financial. Consulting sales accounted for $3.04bn, up 38% on the quarter, and outsourcing sales grew 17% to $2.07bn. Accenture highlighted strong demand for consulting in EMEA and outsourcing in the Americas during the quarter.
Regionally, EMEA sales jumped 48% in Q4 to $2.43bn, and Accenture’s Asia-Pacific business was up 39% to $487.8m. The strongest segment performances came in the government business, where sales increased 50% to $639.6m, and in products, up 46% to $1.27bn. In the products vertical, for example, Accenture noted strong fourth quarter demand among consumer goods clients worldwide and a strong performance in the retail sector in the Americas and Asia-Pacific.
In the financial services segment, where Accenture said it was on red alert due to current market conditions, the company has yet to feel any impact from the US subprime mortgage collapse. Some Indian offshore players, which are much smaller than Accenture and have far fewer clients and are much more dependency on individual accounts, have issued mortgage-related warnings in the past few months. But so far the crisis has yet to touch any of the bigger, more diversified players such as Accenture and its peers.
In fact the company reported blistering demand for its high-end management consulting work in financial services. As the wave of domestic consolidation in the US over the past decade or so gives way to a new era of global consolidation, Accenture said it is seeing a lot of consulting work pop up around these new mergers. The lower-end outsourcing work for financial services, on the other hand, is commoditized and goes to an ultra-competitive field of captive centers and offshore players, Accenture said.
Net profit for the fourth quarter fell 9% to $316.8m on higher expenses, on the quarter. Earnings per share, at $0.50, beat out analyst forecasts of $0.48. For the full year, EPS came in at $1.97 on revenue of $19.7bn, up 18% from fiscal 2006.
Fourth-quarter bookings were $4.9bn, divided between $3.1bn in new consulting work and $1.8bn in outsourcing deals. This ratio is tilted more toward consulting than the full-year bookings of $22bn, which included $12.7bn in consulting and $9.3bn in outsourcing. On the outsourcing side, there’s strong momentum in learning and procurement BPO, plus continued F&A strength. Applications is still the biggest outsourcing segment, and Accenture said this are was increasingly being bundled with BPO or infrastructure work.
On the consulting side, there’s no apparent slowdown, with strong continued results in management consulting, as well as systems integration, where global clients are signing longer, multiyear deals for their latest rollouts, Accenture said. While economic uncertainty is a concern among clients, CEO Bill Green said that its big US clients who may have underperformed domestically lately have made up for it with exports or better results in their foreign operations. Only some smaller businesses that have financing tied to home equity are seeing fallout from the mortgage crisis, he added. And should companies hit the brakes on their consulting spending, it will likely hit the discretionary, boutique-type projects that Accenture doesn’t handle, Green said.
For fiscal 2008, Accenture expects sales up 9% to 12%, a range between $21.1bn and $22.1bn. Bookings for the year are forecast at $22bn to $24bn, and EPS guidance stands at $2.21 to $2.26. First-quarter revenue expectations are between $5.4bn and $5.6bn.
The offshore surge continues at Accenture. Of the 171,000 overall employees it ended the year with, 71,000 are in global delivery centers. Of these, nearly half–35,000–are in India.
