01—Abstract
Summary
Summary of the 10-Q filed December 20, 2010. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported solid revenue growth for the first quarter of fiscal year 2011, with net revenues increasing by 12% in U.S. dollars and 14% in local currency, reaching $6.05 billiona.
This performance marks a significant turnaround from the previous year's downturn, with all operating groups except Health & Public Service showing strong year-over-year growth. The company's consulting and outsourcing businesses both saw increased net revenues, indicating a broader market recovery and continued demand for Accenture's services. Profitability saw a slight dip in gross margin to 32.2%b from 33.1% year-over-year, attributed to higher costs associated with growth, including increased subcontractor and training expenses, as well as higher compensation.
Despite this, operating income increased by 11% to $827 millionc. The company's effective tax rate also decreased to 28.3% from 30.5%, contributing to an increase in diluted earnings per share to $0.81 from $0.67.
02—Key points
Key Highlights
- Net revenues increased 12% to $6.05 billion for the first quarter of fiscal 2011, compared to $5.38 billion in the prior year, signaling a robust recovery.
- Strong growth was observed across most operating segments, with Financial Services, Resources, Products, and Communications & High Tech showing double-digit local currency growth.
- Consulting net revenues grew 14% to $3.57 billion, while outsourcing net revenues increased 10% to $2.48 billion, demonstrating demand in both service lines.
- Operating income increased 11% year-over-year to $827 million, though operating margin slightly decreased to 13.7% from 13.9% due to higher cost of services.
- Diluted earnings per share (EPS) rose to $0.81 from $0.67 in the prior year, driven by revenue growth, lower weighted average shares, and a reduced effective tax rate.
- The company's headcount increased significantly to approximately 211,000 employees as of November 30, 2010, reflecting increased demand for services.
- Accenture maintained a strong liquidity position with $4.2 billion in cash and cash equivalents as of November 30, 2010.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2011, Accenture plc kept $0.08.
- Revenue$6.48B100.0%
- Cost of revenue−$4.53B70.0%
- Gross profit$1.94B30.0%
- Operating costs−$1.12B17.3%
- Operating income$826.9M12.8%
- Interest, other & tax−$292.2M4.5%
- Net income$534.7M8.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2011filed December 20, 2010Financial Statements
Q1 FY2011 against Q1 FY2010
| Line item | Q1 FY2011Q1 FY2010 | Change |
|---|---|---|
| Revenue | $6.48B$5.75B | +12.7% |
| Cost of Revenue | $4.53B$3.96B | +14.4% |
| Gross Profit | $1.94B$1.78B | +9.0% |
| Operating Expenses | $5.65B$5.00B | +13.0% |
| Operating Income | $826.93M$746.41M | +10.8% |
| Interest Expense | $4.74M$4.48M | +5.7% |
| Net Income | $534.71M$444.82M | +20.2% |
| EPS (Basic) | $0.84$0.70 | +20.0% |
| EPS (Diluted) | $0.81$0.67 | +20.9% |
| Shares Outstanding (Basic) | 637.30M631.53M | +0.9% |
| Shares Outstanding (Diluted) | 743.71M774.56M | −4.0% |
05—Questions
Frequently Asked Questions
What is Accenture's revenue performance in the first quarter of fiscal year 2011?
Accenture reported a strong rebound in revenue for the first quarter of fiscal year 2011. Net revenues increased by 12% in U.S. dollars and 14% in local currency, reaching $6.05 billion, up from $5.38 billion in the same period last year. This growth was driven by broad-based demand across most of its operating segments.
How did Accenture's profitability fare in this quarter?
While net revenues and operating income saw increases, the gross margin slightly decreased to 32.2% from 33.1% year-over-year. This was primarily due to higher costs associated with increased business activity, such as higher subcontractor and training expenses, as well as increased compensation costs. However, operating income still grew 11% to $827 million.
What is the outlook for Accenture's consulting and outsourcing businesses?
Both segments showed positive growth. Consulting net revenues increased by 14% to $3.57 billion, and outsourcing net revenues grew by 10% to $2.48 billion. The company indicated that market demand has improved and expects continued growth in most areas, driven by client initiatives focused on cost savings, performance improvement, and growth objectives.
How is Accenture managing its workforce and expenses?
Accenture has increased its workforce by 20% year-over-year to approximately 211,000 employees to meet rising demand. The company actively manages its workforce size, attrition, and hiring to balance skills and client demand. While costs for services and sales and marketing increased, general and administrative costs decreased as a percentage of revenue due to cost management efforts, including utilizing lower-cost locations.
06—Continue