Accenture sees sales and profits up as it turns to SMAC

Sales in social, mobile, analytics and cloud are growing fast

Outsourcer Accenture has reported an increase in global sales and operating profits for the third quarter, but sales in the EMEA region were slightly down.

For the third quarter ended 31 May net revenues were US$7.2 billion, an increase of 1 percent in US dollars, and 3 percent in local currency over the same period last year.

This was slightly below the company's guided range of $7.25 billion to $7.50 billion.

Operating income for the quarter increased to $1.14 billion, including the benefit of $50 million from a reduction in corporate reorganisation liabilities. Excluding the benefit, operating income increased 3 percent to $1.09 billion, with operating margins also up.

New contract bookings for the quarter were $8.3 billion, with consulting bookings of $3.9 billion and outsourcing bookings of $4.4 billion.

Pierre Nanterme, Accenture CEO, said: "Our third-quarter results were solid overall, although consulting revenues were below our expectations. We delivered very good profitability, with operating margin expansion and EPS (earnings per share) growth reflecting the disciplined management of our business."

He added: "Quarterly new bookings of $8.3 billion brought us to nearly $25 billion for the first three quarters of the year, which positions us well for the future and demonstrates the relevance of our services and capabilities to the needs of our clients."

EMEA third quarter sales were down to $2.78 billion, compared with $2.91 billion for the third quarter of 2012, a decrease of 4 percent in US dollars and 1 percent in local currency.

TechMarketView analyst Anthony Miller said of the results: "Accenture incoming CFO David Rowland on last might's Q3 investor call announced one of Accenture's rare 'misses' in company guidance, because consulting softened more quickly and severely than management expected.

"Outsourcing was the opposite story, with revenues and bookings higher than expected, but Accenture forecasts a slowdown in outsourcing growth."

An acronym being promoted in the US covering growth areas is "SMAC" - social, mobile, analytics and cloud - and Accenture said sales in these areas were growing faster than its traditional services, "but there were no numbers to back this up", said Miller.

Accenture's Nanterne said, "The creators of 'SMAC' are in the US and the early adopters of these new technologies are more in the US."

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Antony Savvas

Computerworld UK
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