Accenture Lifts Annual Revenues Outlook, Lifts Dividend 10%

Scott Peters
23 Jun, 2022
New York City

Accenture, the worldwide professional services provider reported another quarter of revenues and earnings growth and stable operating margins.  

Revenues increased by double digits on all business segments driven by  strong demand for services and a surging backlog. 

Accenture Plc revenues in the third quarter ending in May increased 22% to $16.2 billion.

Net income increased 16% to $1.82 billion from $1.57 billion a year ago. 

Gross margin was stable and edged slightly lower to 32.9% from 33.2% a year ago and selling and general expenses fell to 16.8% from 17.2%. 

Diluted earnings per share increased to $2.79 from $2.40 a year ago. 

Operating cash flow for the quarter was $3.06 billion and after deducting property and equipment expenses of $195 million free cash flow was $2.87 billion, an increase from $2.24 billion a year ago. 

 

Revenues by Geography 

North America revenues increased 23% in local currencies and U.S. dollars from a year ago to $7.6 billion and revenues in Europe rose 20% to $5.35 billion, an increase of 30% in local currencies. 

Revenues in other markets increased 22% in the U.S. dollar and 30% in local currencies from a year ago to $3.19 billion. 

 

Revenues by Industry Groups 

Financial services revenues increased 19% to $3.08 billion, communication, media and technology revenues rose 27% to $3.4 billion, resources and energy segment advanced 21% to $2.13 billion, and products segment gained 25% to $4.6 billion. 

Revenues in the health & public services segment advanced 16% to $2.92 billion. 

 

New Orders Rise 10% 

New orders in the quarter increased 10% to $17.0 billion and jumped 15% in local currencies. 

Consulting new orders increased 54% to $9.1 billion and outsourcing new bookings advanced 46% to $7.8 billion. 

Total backlog of orders increased to $53.0 billion at the end of the quarter. 

 

Stock Repurchase Activity

During the third quarter, Accenture repurchased 3.1 million shares for a total of $972 million, including approximately 2.9 million shares repurchased in the open market. 

The company has repurchased in fiscal year three quarters 10.1 million shares for a total of $3.51 billion, including approximately 7.7 million shares repurchased in the open market.

The company still has $3.7 billion available as of the end of May towards the repurchase program. 

 

Dividend Hiked 10% 

Accenture hiked quarterly dividend 10% to 97 cents a share to shareholders on record at the close of July 14, 2022 and payable on August 15. 

In the previous quarter, the company paid $614 million in dividends or  97 cents a share on May 13 to shareholders on record April 14, totaling $1.84 billion payments in the fiscal year.  

 

Guidance and Outlook 

Accenture guided in the fiscal year 2022 fourth quarter revenues in the range of $15.0 billion to $15.5 billion, an increase of 20% to 24% in local currency and reflecting the estimate of a negative 8% foreign-exchange impact compared with the fourth quarter of fiscal 2021. 

For fiscal year 2022, the company anticipates revenues in local currencies to increase in the range of 25.0% to 26.5%, higher than the previous estimate between 24% and 26%. 

The company also lifted its estimate of operating margin by 10 basis points to 15.2% for fiscal year 2022. 

The company narrowed its fiscal year 2022 diluted earnings per share range to between $10.61 and $10.70 from the previous range between $10.61 and $10.81. 

The company reiterated its estimate of operating cash flow in the fiscal year 2022 between $8.7 billion and $9.2 billion. 

 

Company and Stock 

Accenture is a professional services company headquartered in Dublin, Ireland and operating from New York provides professional services around the world. 

Accenture worldwide employees total 710,000 including 300,000 in India.  

Accenture Plc declined 0.6% to $284.71 and in the year so far has declined 29.9%.