Accenture plc Quarterly Report for Q1 Ended Nov 30, 2014

Summary

Accenture plc (ACN) reported solid performance for the first quarter of fiscal year 2015, ending November 29, 2014. Net revenues grew by 7% in U.S. dollars and 10% in local currency, indicating strong demand across most of its business segments and geographic regions. The company saw particularly robust growth in its outsourcing services, which increased by 11% in U.S. dollars and 14% in local currency, driven by client focus on operational transformation and cost savings. Profitability metrics showed a slight pressure on gross margin, which decreased to 32.2% from 33.3% year-over-year, mainly due to higher labor costs and increased subcontractor usage. However, operating margin improved to 15.0% from 14.8%, driven by efficiencies in sales and marketing, and general and administrative costs. Diluted Earnings Per Share (EPS) increased by $0.14 to $1.29, reflecting overall improved operational results and a reduction in weighted average shares outstanding.

Key Highlights

• 1Net revenues increased 7% year-over-year in USD to $7.9 billion, with a stronger 10% growth in local currency, signaling healthy demand.
• 2Outsourcing services showed significant strength, with net revenues up 11% in USD and 14% in local currency.
• 3Diluted Earnings Per Share (EPS) rose to $1.29, a 13% increase from $1.15 in the prior year's comparable quarter.
• 4Operating income grew 9% to $1.19 billion, and operating margin slightly improved to 15.0% from 14.8%.
• 5Gross margin experienced a slight decline to 32.2% from 33.3% due to increased labor costs, including higher subcontractor utilization.
• 6The company maintained a strong liquidity position with $4.5 billion in cash and cash equivalents and significant available borrowing facilities.
• 7Accenture repurchased approximately $571 million of its Class A ordinary shares under its open-market share purchase program during the quarter.

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