01—Abstract
Summary
Summary of the 10-Q filed March 26, 2010. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported its financial results for the second quarter and first half of fiscal year 2010, ending February 28, 2010.
The company experienced a decrease in net revenues for both the quarter and the year-to-date period, largely attributed to ongoing economic impacts affecting client demand, particularly in its consulting services. While net revenues saw a modest decline, operating income and margins demonstrated resilience in certain segments, with gross margin showing improvement. The company continued its focus on cost management and operational efficiency.
Despite revenue headwinds, Accenture maintained a strong utilization rate for its client-service professionals and actively managed its workforce. The company also continued its share repurchase program, reflecting confidence in its financial position and commitment to returning value to shareholders. Overall, Accenture navigated a challenging economic environment by focusing on core operational strengths and strategic resource management.
02—Key points
Key Highlights
- Net revenues for the second quarter of fiscal 2010 decreased by 2% in USD to $5.18 billion, and by 8% in local currency, compared to the prior year period.
- For the six months ended February 28, 2010, net revenues decreased by 6% in USD to $10.56 billion, and by 10% in local currency.
- Diluted earnings per share for the second quarter were $0.60, a decrease from $0.63 in the prior year period, impacted by lower revenues and operating results.
- Gross margin improved to 32.7% for the second quarter of fiscal 2010, up from 30.8% in the prior year period, driven by cost management and operational efficiencies.
- The company's utilization rate remained strong at approximately 88% for the second quarter of fiscal 2010.
- Accenture continued its share repurchase program, with approximately $4.1 billion in aggregate available authorization for share repurchases and redemptions as of February 28, 2010.
- Cash and cash equivalents stood at $4.1 billion as of February 28, 2010, reflecting a decrease from $4.5 billion at the end of the previous fiscal year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2010, Accenture plc kept $0.07.
- Revenue$5.54B100.0%
- Cost of revenue−$3.85B69.5%
- Gross profit$1.69B30.5%
- Operating costs−$1.04B18.8%
- Operating income$651.0M11.8%
- Interest, other & tax−$251.2M4.5%
- Net income$399.8M7.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2010filed March 26, 2010Financial Statements
Q2 FY2010 against Q2 FY2009
| Line item | Q2 FY2010Q2 FY2009 | Change |
|---|---|---|
| Revenue | $5.54B$5.66B | −2.1% |
| Cost of Revenue | $3.85B$4.04B | −4.7% |
| Gross Profit | $1.69B$1.62B | +4.2% |
| Operating Expenses | $4.89B$4.98B | −1.9% |
| Operating Income | $650.97M$677.47M | −3.9% |
| Interest Expense | $4.52M$3.21M | +40.6% |
| Net Income | $399.76M$411.44M | −2.8% |
| EPS (Basic) | $0.63$0.66 | −4.5% |
| EPS (Diluted) | $0.60$0.63 | −4.8% |
| Shares Outstanding (Basic) | 638.70M620.46M | +2.9% |
| Shares Outstanding (Diluted) | 769.40M787.50M | −2.3% |
05—Questions
Frequently Asked Questions
How did Accenture's revenue perform in the second quarter of fiscal year 2010?
Accenture's net revenues for the second quarter of fiscal year 2010 decreased by 2% in U.S. dollars to $5.18 billion, and by 8% in local currency, compared to the same period in fiscal year 2009. This decline was primarily attributed to continued impacts of the economic downturn on client demand, especially for consulting services.
What was the impact on Accenture's profitability, specifically earnings per share (EPS)?
Diluted earnings per share for the second quarter of fiscal year 2010 were $0.60, a decrease from $0.63 in the prior year's second quarter. This reduction was primarily due to lower revenues and operating results, partially offset by favorable foreign currency exchange rates and fewer weighted average shares outstanding.
Did Accenture's operational efficiency improve despite the revenue decline?
Yes, Accenture demonstrated improved operational efficiency. The gross margin increased to 32.7% for the second quarter of fiscal 2010, up from 30.8% in the prior year. Additionally, the company maintained a strong client-service professional utilization rate of approximately 88% during the quarter.
How is Accenture managing its capital and shareholder returns?
Accenture continued its active share repurchase program, with approximately $4.1 billion in available authorization for repurchases and redemptions as of February 28, 2010. The company reported cash and cash equivalents of $4.1 billion at the end of the quarter. While cash decreased from the prior year-end, the company indicated that its operating cash flows and available liquidity are expected to be sufficient for its needs.
06—Continue