01—Abstract
Summary
Summary of the 10-Q filed March 25, 2011. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported a strong financial performance for the second quarter and first half of fiscal year 2011, indicating a robust recovery from the previous year's economic downturn.
Net revenues for the second quarter increased by 17% in U.S. dollars (18% in local currency) to $6.05 billiona, and for the first half, revenues grew 15% in U.S. dollars (16% in local currency) to $12.10 billion. This growth was broad-based across all operating groups and geographies, with particular strength in the Financial Services and Resources sectors. The company saw significant improvements in its consulting business, with revenues up 20% year-over-year for the quarter, and a solid performance in outsourcing as well.
Accenture also demonstrated effective cost management, with operating expenses growing at a slightly lower rate than revenues, leading to an expansion in operating margin to 12.7% for the quarter. Diluted earnings per share also saw a substantial increase, rising to $0.75b for the quarter and $1.56 for the first half, reflecting the company's operational efficiency and top-line growth.
02—Key points
Key Highlights
- Net revenues increased by 17% year-over-year in the second quarter of fiscal 2011 to $6.05 billion, driven by strong demand across all segments.
- Consulting net revenues saw a significant increase of 20% year-over-year in the second quarter, indicating a healthy rebound in client project spending.
- All five operating groups experienced revenue growth in local currency for both the quarter and the first half of fiscal 2011.
- Operating margin improved slightly to 12.7% in the second quarter of fiscal 2011 from 12.6% in the prior year period, driven by effective cost management.
- Diluted earnings per share increased to $0.75 for the second quarter and $1.56 for the first half of fiscal 2011, up from $0.60 and $1.27 respectively in the prior year.
- The company maintained a strong liquidity position with $4.7 billion in cash and cash equivalents as of February 28, 2011, and ample borrowing facilities.
- Headcount increased to approximately 215,000 as of February 28, 2011, reflecting growing demand for Accenture's services.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2011, Accenture plc kept $0.08.
- Revenue$6.50B100.0%
- Cost of revenue−$4.58B70.5%
- Gross profit$1.92B29.5%
- Operating costs−$1.15B17.6%
- Operating income$771.6M11.9%
- Interest, other & tax−$268.6M4.1%
- Net income$503.0M7.7%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2011filed March 25, 2011Financial Statements
Q2 FY2011 against Q2 FY2010
| Line item | Q2 FY2011Q2 FY2010 | Change |
|---|---|---|
| Revenue | $6.50B$5.54B | +17.3% |
| Cost of Revenue | $4.58B$3.85B | +19.0% |
| Gross Profit | $1.92B$1.69B | +13.4% |
| Operating Expenses | $5.72B$4.89B | +17.1% |
| Operating Income | $771.58M$650.97M | +18.5% |
| Interest Expense | $3.51M$4.52M | −22.4% |
| Net Income | $503.02M$399.76M | +25.8% |
| EPS (Basic) | $0.78$0.63 | +23.8% |
| EPS (Diluted) | $0.75$0.60 | +25.0% |
| Shares Outstanding (Basic) | 646.29M638.70M | +1.2% |
| Shares Outstanding (Diluted) | 743.78M769.40M | −3.3% |
05—Questions
Frequently Asked Questions
What was Accenture's revenue growth in the reported quarter, and what were the key drivers?
Accenture reported a 17% increase in net revenues to $6.05 billion for the second quarter of fiscal 2011, compared to the same period last year. This growth was driven by a strong rebound in client demand, particularly in the Financial Services and Resources sectors, and a robust performance in its consulting services, which saw a 20% year-over-year increase.
How did Accenture manage its operating expenses and profitability?
Accenture demonstrated effective cost management, with operating expenses growing at a slightly slower pace than net revenues. This led to a slight expansion in operating margin to 12.7% for the second quarter of fiscal 2011. While cost of services increased due to higher compensation and recruiting costs, sales and marketing, and general and administrative costs as a percentage of net revenues decreased.
What is the outlook for Accenture's business based on this report?
The company expects growth to continue in most areas of its business, supported by strong new contract bookings over the preceding quarters. However, management noted that growth may moderate, particularly in outsourcing, and will vary across segments and geographic regions. Uncertainty in some global markets was also mentioned as a factor to monitor.
How did Accenture's earnings per share (EPS) perform?
Accenture's diluted earnings per share significantly increased to $0.75 for the second quarter of fiscal 2011, up from $0.60 in the prior year's quarter. For the first six months of fiscal 2011, diluted EPS rose to $1.56, compared to $1.27 in the same period last year, reflecting the company's improved revenue and operating performance.
06—Continue