01—Abstract
Summary
Summary of the 10-Q filed June 29, 2012. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported solid financial results for the nine months ended May 31, 2012, demonstrating continued revenue growth driven by strong performance in its outsourcing business.
Net revenues increased by 12% in both U.S. dollars and local currency to $21.03 billiona for the nine-month period, compared to the prior year. This growth was fueled by double-digit outsourcing revenue increases across all operating groups. While the consulting segment saw moderated growth, particularly in EMEA, overall operating income improved by 15% to $2.93 billion, leading to a reported diluted Earnings Per Share (EPS) of $2.96 for the nine months, up from $2.48 in the prior year.
The company maintained a healthy liquidity position with cash and cash equivalents of $5.6 billionb. Operating activities provided strong cash flow, though this was partially offset by increased cash used in investing and financing activities, notably higher dividend payments and business acquisitions. Accenture also continued its commitment to returning capital to shareholders through share repurchases, with a significant portion of operating cash flow allocated to this program.
Overall, Accenture showcased resilience and growth in a dynamic economic environment, with a strategic shift towards outsourcing services contributing significantly to its top-line performance. The company's ability to manage operating expenses effectively, coupled with robust demand for outsourcing, positions it well for continued performance.
02—Key points
Key Highlights
- Net revenues increased by 12% to $21.03 billion for the nine months ended May 31, 2012, compared to the same period in the prior year.
- Outsourcing segment showed robust growth, with double-digit year-over-year revenue increases in local currency across all operating groups.
- Operating income grew by 15% to $2.93 billion for the nine months ended May 31, 2012.
- Diluted Earnings Per Share (EPS) rose to $2.96 for the nine months ended May 31, 2012, up from $2.48 in the prior year.
- The company maintained a strong liquidity position with $5.63 billion in cash and cash equivalents as of May 31, 2012.
- Significant cash outflow in financing activities, primarily due to an increase in cash dividends paid.
- Accenture continued its share repurchase program, utilizing a substantial portion of operating cash flow.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2012, Accenture plc kept $0.09.
- Revenue$7.64B100.0%
- Cost of revenue−$5.27B69.0%
- Gross profit$2.37B31.0%
- Operating costs−$1.31B17.1%
- Operating income$1.06B13.9%
- Interest, other & tax−$371.5M4.9%
- Net income$689.2M9.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2012filed June 29, 2012Financial Statements
Q3 FY2012 against Q3 FY2011
| Line item | Q3 FY2012Q3 FY2011 | Change |
|---|---|---|
| Revenue | $7.64B$7.20B | +6.1% |
| Cost of Revenue | $5.27B$4.89B | +7.7% |
| Gross Profit | $2.37B$2.31B | +2.7% |
| Operating Expenses | $6.58B$6.25B | +5.2% |
| Operating Income | $1.06B$949.42M | +11.7% |
| Interest Expense | $3.50M$2.83M | +23.7% |
| Net Income | $689.22M$628.01M | +9.7% |
| EPS (Basic) | $1.07$0.96 | +11.5% |
| EPS (Diluted) | $1.03$0.93 | +10.8% |
| Shares Outstanding (Basic) | 645.76M651.34M | −0.9% |
| Shares Outstanding (Diluted) | 729.53M746.20M | −2.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of Accenture's revenue growth in the reported period?
The primary driver of Accenture's revenue growth was the strong performance of its outsourcing business, which experienced double-digit year-over-year revenue increases in local currency across all operating groups. This offset the moderated growth seen in the consulting segment.
How did Accenture manage its expenses, and what was the impact on profitability?
Accenture managed its expenses effectively. While cost of services increased, Sales and Marketing and General and Administrative costs as a percentage of net revenues decreased for both the three and nine-month periods. This expense management, combined with revenue growth, led to an increase in operating income and operating margin.
What is Accenture's liquidity position, and how is it managing its cash flow?
Accenture maintained a healthy liquidity position with $5.63 billion in cash and cash equivalents as of May 31, 2012. Operating activities provided strong cash flow, sufficient to cover its needs. However, financing activities showed a significant increase in cash used, mainly due to higher dividend payments. The company intends to continue using a significant portion of its operating cash flow for share repurchases.
Are there any significant risks or uncertainties highlighted in the filing?
The filing highlights various risks, including potential adverse effects from volatile economic conditions, client demand fluctuations, cybersecurity threats, and foreign currency exchange rate fluctuations. The company also notes the competitive nature of the consulting and outsourcing markets and the risks associated with its geographically diverse operations.
06—Continue