Accenture (ACN) Q2 Earnings Surpass Estimates, Revenues Miss
Accenture plc ACN has reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
ACN’s earnings (excluding 14 cents from non-recurring items) of $2.8 per share surpassed the Zacks Consensus Estimate by 4.1% and improved 3% from the year-ago quarter. Total revenues of $15.8 billion missed the consensus estimate marginally and declined slightly from the year-ago quarter.
Accenture PLC Price, Consensus and EPS Surprise
Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC Quote
Revenues in Detail
Based on the type of work, Managed Services revenues of $7.8 billion increased 3% from the year-ago quarter both on a reported basis and in terms of local currency, beating our estimate of $7.7 billion. Consulting revenues declined 3% from the year-ago quarter both on a reported basis and in terms of local currency to $8 billion, meeting our estimate.
Segment-wise, Health & Public Service revenues of $3.3 billion increased 10% from the year-ago quarter, both on a reported basis and in terms of local currency. The figure surpassed our estimate of $3.2 billion. Resources revenues of $2.2 billion increased 3% from the year-ago quarter on a reported basis and 4% on a local currency basis, meeting our estimate. Product revenues of $4.8 billion grew 1% from the year-ago quarter in terms of U.S. dollars, beating our estimated $4.7 billion.
Communications, Media & Technology revenues of $2.7 billion decreased 8% on a reported basis and 7% in terms of local currency, meeting our estimate. Financial Services revenues of $2.8 billion decreased 6% from the year-ago quarter’s reading both on a reported basis and in terms of local currency. It missed our estimate of $3 billion.
Geographically, revenues of $5.6 billion from Europe increased 1% on a reported basis but declined 2% in terms of local currency, meeting our estimate. Revenues of $2.8 billion from Growth Markets decreased 1% year over year on a reported basis but increased 6% in terms of local currency, meeting our anticipated figure. Revenues of $7.4 billion from North America decreased marginally from the year-ago quarter, meeting our estimate.
Booking Trends
Accenture reported new bookings worth $21.6 billion in second-quarter fiscal 2024, down 2% from the year-ago quarter on both reported basis and in terms of local currency. Consulting bookings totaled $10.5 billion and Managed Services bookings summed $11.1 billion.
Operating Results
The gross margin (gross profit as a percentage of net revenues) for second-quarter fiscal 2024 was 30.9%, up 30 basis points (bps) from the year-ago quarter. Adjusted operating income was $2.2 billion, down marginally from the year-ago quarter. The adjusted operating margin of 13.7% declined 10 bps from the year-ago quarter.
Balance Sheet & Cash Flow
Accenture exited second-quarter fiscal 2024 with cash and cash equivalents of $5.1 billion compared with $7.1 billion at the end of first-quarter fiscal 2024. ACN generated $1.6 billion in cash from operating activities. Capital expenditure in the reported quarter was $40.9 million.
The free cash flow was $1.6 billion. Accenture repurchased 3.8 million shares for $1.3 billion, including 2.2 million shares repurchased in the open market. The company paid out a dividend of $813 million in the second quarter of fiscal 2024.
Q3 and 2024 Guidance
For third-quarter fiscal 2024, the company expects revenues of $16.25-$16.85 billion. The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $15.8 billion
For fiscal 2024, adjusted earnings per share (EPS) is expected to be $11.97-$12.2 (compared with $11.97-$12.32 mentioned previously). The consensus estimate of earnings is pegged at $12.2 per share, higher than the mid-point ($12.1) of the guided range. Accenture expects its adjusted operating margin for the fiscal year to be 15.5% (compared with 15.5-15.7% stated previously). Operating cash flow is anticipated to be $9.3-$9.9 billion. The free cash flow is expected between $8.7 billion and $9.3 billion.
Currently, Accenture carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of Peers
Verisk Analytics Inc. VRSK reported mixed fourth-quarter 2023 results.
VRSK’s earnings per share of $1.4 missed the Zacks Consensus Estimate by 1.4% and decreased 2.1% year over year. Total revenues of $677.2 million surpassed the consensus estimate by 1% and increased 7.4% year over year.
FTI Consulting, Inc. FCN reported better-than-expected fourth-quarter 2023 results.
FCN’s earnings per share of $2.28 surpassed the Zacks Consensus Estimate by 45.2% and increased 50% on a year-over-year basis. Total revenues of $924.7 million beat the consensus mark by 11.5% and increased 19.4% from the year-ago quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Accenture PLC (ACN) : Free Stock Analysis Report
FTI Consulting, Inc. (FCN) : Free Stock Analysis Report
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
