John Fowler, Big4.com
(blog) Accenture (NYSE: ACN)’s Q4-2010 and FY 2010 financial results ending August 31, 2010 blew past Wall Street expectations. To add to this, Accenture projected double digit growth in 2011 revenue and 1% higher-than-previous-guidance growth in 2011 EPS. Investors loved it, moving the stock up 3.6% after hours.
For the quarter,
Q4-2010 revenues were $5.42 billion, up 5% in U.S. dollars and 8% in local currency compared compared to Q4-2009. Diluted EPS was $0.66. Wall Street was expecting revenues of $5.31 billion and EPS of 63 cents.
Q4-2010 consulting net revenues were $3.09 billion, up 6% in U.S. dollars and 9% in local currency compared with Q4-2009. Outsourcing net revenues were $2.33 billion, up 4% in US dollars and 7% in local currency compared with Q4-2009. US dollar FX impact in the fourth quarter was negative 3% as the dollar strengthened. Q4-2010 new bookings were $6.5 billion. Operating margin was 13.2%. Free cash flow was $1.15 billion.
Q4-2010 utilization was 86%, compared with 88% for the third quarter of fiscal 2010 and 86 % for the fourth quarter of fiscal 2009. Attrition for the fourth quarter was 17 %, compared with 17 % for the third quarter of fiscal 2010 and 10 % for the fourth quarter of fiscal 2009.
Revenues in Asia Pacific: $688 million, compared with $608 million for the fourth quarter of fiscal 2009, an increase of 13 % in U.S. dollars and 7 % in local currency
For the full year,
FY 2010 net revenues were $21.55 billion, flat in U.S. dollars and a 2% drop in local currency compared with FY 2009. Diluted EPS $2.66. Wall Street was expecting revenues of $21.45 billion and EPS of $2.63. FY 2010 new bookings were $25.0 billion. Operating margin was 13.5%. Free cash flow was $2.85 billion, which exceeded the top end of the company’s expectations by $350 million. Utilization for the full fiscal year 2010 was 87 %, compared with 84 % for fiscal 2009. Attrition for the full year was 15 %, compared with 10 % for fiscal 2009. Accenture’s total cash balance at Aug. 31, 2010 was $4.84 billion, compared with $4.54 billion at Aug. 31, 2009.
So Accenture beat the Street on both on the top and bottom lines.
Accenture also declared a semi-annual cash dividend of $0.45 per share, an increase of 7.5 cents per share, or 20 %, over its previous semi-annual dividend in March 2010.
In Q4-2010, Accenture repurchased or redeemed 18.9 million shares for a total of $738 million, including $667 million for 17.1 million shares repurchased on the open market. During the full fiscal year 2010, Accenture repurchased or redeemed 51.8 million shares for a total of $2.07 billion, including $986 million for 24.9 million shares repurchased in the open market. Accenture’s total remaining share repurchase authority at Aug. 31, 2010 was approximately $2.9 billion.
Looking forward to 2011,
Accenture expects Q1-2011 net revenues to be $5.6 – $5.8 billion, which assumes a foreign-exchange impact of negative 3 % compared with the Q1-2010. For full 2011 fiscal year assume a foreign-exchange impact of negative 1 % compared with fiscal 2010; and net revenue growth to be in the range of 7 % to 10 % in local currency. Accenture expects diluted EPS growth to be in the range of 13 % to 16 %, or $3.00 to $3.08, an increase from the previously guided range of 12 % to 15 %. Accenture is targeting new bookings for fiscal 2011 in the range of $25 billion to $28 billion.
William D. Green, Accenture’s chairman & CEO sounded very optimistic, saying that the strong fourth-quarter performance demonstrated further evidence of growth and momentum. Strong bookings — including consulting bookings of more than $3.5 billion — show increasing demand for services. Significant free cash flow, and exceptionally strong balance sheet coupled with commitment to return cash to shareholders through an increased semi-annual cash dividend and through the repurchase of more than $2 billion of our shares during fiscal 2010 – all point to a confident outlook.
We were quite confident of an excellent quarter, though we never got around to posting our forecast before the earnings. An upturn in the global economy, good earnings from Capgemini, strong confidence from IBM, a nice revenue increase in Deloitte Consulting revenue, all pointed to a great performance.
And so, another stellar result from the Accenture machine, what with a great beat, increased dividends, better utilization%, more cash, more share buybacks and a confident outlook.
What’s not to like for a shareholder? Not much, as we find out. And quite surely, the stock will move even higher tomorrow. (blog)