Accent on the Future
Nitesh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Accenture (NYSE: ACN) emerged from the Arthur Anderson in late 90’s, whose base was uprooted because of the Enron Scandal, is now perhaps the world’s largest consulting firm in short span of 11years. It is certainly off to good start for the fiscal 2013, first quarter, as it posted the revenue of $7.22 billion and Earnings per share of $1.06 for the first quarter end.
Accenture continues to have very strong balance sheet, ending this quarter as well, as it had liquid fund of $5.7 billion. Bookings for the quarter were $7.5 billion in which Consulting bookings contributed $4.2 billion, and outsourcing bookings added $3.3 billion. Net revenues for the first quarter were $7.22 billion, an increase of 2% in U.S. Dollars as compared over the same period of last year. Gross margin was 32.8%, up by a 100bps i.e. 31.8% for the same period of last year. On the debit side, General and administrative expense stood at 6.2% of net revenue i.e. $449 million and sales and marketing expense for the quarter was $868 million or 12% of net revenue. The quarter's results reflected higher costs so as to replenish sales pipeline after record bookings in last quarter of fiscal 2012.
Bullish in future
For the second quarter of fiscal 2013, Accenture expects its revenues to be in the range of $6.9 billion to $7.15 billion. New bookings expectations are in the range of $31 billion to $34 billion for the full year and operating margin to be in the range of 14.1% to 14.2%. As far as investors are considered, Accenture expects them to treat with diluted EPS in the range of $4.24 to $4.32. Accenture is further enhancing its capabilities in Digital, Analytics and Mobility to help Verizon Wireless to launch a new strategic initiative called Precision Market Insights. Precision Market Insights is designed to deliver targeted business intelligence to retailers and other enterprises that want to expand the reach and precision of their marketing efforts.
Take of others
International Business Machines (NYSE: IBM) having its presence in five segments provides IT services worldwide. After successful acquisition of PSS Systems in 2010 and Vivisimo earlier this year, it recently is planning to acquire Stored IQ Inc. which will allow its clients to respond more efficiently to litigation and regulatory events. IBM announced a project that will simplify electric vehicle (EV) charging and easier payment for consumers, irrespective of their geographical location. It is B2B Marketplace will allow energy providers, car manufacturers, and charging point owners to share and integrate services on one common IT platform. IBM is involved in more than 150 smart grid engagements around the world, in both developed as well as emerging markets. Its vision is to bring a new level of intelligence on how the world works and how every person, business and man-made system interacts. IBM currently pays an annual dividend of $3.40 per share which works out to a yield of 1.80% and further it can potentially raise its dividend going forward. So Accenture should not overlook this at any cost.
The results for the first quarter were in line with its expectations and it demonstrates that Accenture continue to deliver value to its clients and run its business with discipline. This is enabling it to drive profitable growth despite a continued volatile economic environment. Further as it continues to see strong demand for services offered by it, and it’s highly diversified portfolio of business positions it very well to seize the opportunities floating in the marketplace. Hence putting Accenture’s egg into one’s nest of portfolio for longer period will serve the adequate level of returns and fuel up the earnings.
Niteshag has no positions in the stocks mentioned above. The Motley Fool owns shares of International Business Machines. Motley Fool newsletter services recommend Accenture Ltd. and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!