Accenture stock is up more than 7%.
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Accenture shares are gaining ground Thursday after the IT consulting giant posted better-than-expected results for its fiscal first quarter ended Nov. 30.
Given the company’s pivotal role as a consulting and outsourcing partner to many large organizations, the strong results are a hopeful sign of strengthening corporate IT spending.
For the quarter, Accenture (ticker: ACN) reported revenue of $11.8 billion, up 4%, or 2% in local currency. That’s above the Street consensus of $11.4 billion and the company’s guidance range of $11.15 billion to $11.55 billion. Accenture noted that revenue was reduced about 2% in the quarter by a decline in reimbursable travel costs as a result of the pandemic.
Adjusted profits were $2.17 a share, up 6% from a year ago and ahead of the Street consensus forecast of $2.05 a share. The company said bookings were $12.9 billion, including $6.6 billion in consulting bookings and $6.3 billion in outsourcing bookings.
Consulting revenue in the quarter was $6.33 billion, down 1%, while outsourcing revenue was $5.43 billion, up 9%. Gross margin was 33.1%, up from 32.1% a year ago.
The company said revenue was up 4% in North America, 5% in Europe, and 1% in “growth markets.”
“I am pleased that we delivered first quarter revenues above our expectations, with broad-based improvement across industries and geographic markets, reflecting the relevance of our services, the strength of our growth strategy and the advantages of our scale in digital, cloud and security,” Accenture CEO Julie Sweet said in a statement. “New bookings, profitability and free cash flow were all very strong, and we again returned substantial cash to shareholders while continuing to invest in our business and our people.”
Accenture bought back 3.3 million shares in the quarter for a cost of $769 million.
For the fiscal second quarter, Accenture sees revenue of $11.55 billion to $11.95 billion, up 2% in local currency, which assumes a 3% positive foreign-exchange impact.
For all of fiscal 2021, Accenture now sees revenue growth of between 4% and 6%, up from a previous forecast range of up 2% to 5%, all in local currency. The company continues to see a full-year operating margin of 14.8% to 15%.
Accenture shares were jumping 7.6%, at $266.20, in recent trading. The S&P 500 was up 0.4%.
Write to Eric J. Savitz at [email protected]
