01—Abstract
Summary
Summary of the 10-Q filed March 26, 2015. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported solid financial performance for the second quarter and first half of fiscal year 2015, demonstrating continued revenue growth and profitability.
Net revenues increased by 5%a in U.S. dollars and 12% in local currency for the second quarter, and 6% in U.S. dollars and 11% in local currency for the six-month period, reflecting strong demand across most of its business segments. The company saw particular strength in its consulting and outsourcing services, driven by client focus on cost savings, operational efficiency, and digital transformation initiatives. Despite a challenging foreign currency environment that impacted reported U.S. dollar figures, Accenture maintained operating margins and achieved growth in diluted earnings per share.
The company's strategic investments in digital services and cloud computing continue to pay off, contributing to robust demand. Accenture also actively managed its capital through share repurchases and dividends, reflecting a commitment to shareholder returns while maintaining sufficient liquidity for future operations and investments.
02—Key points
Key Highlights
- Net revenues grew 5% in U.S. dollars (12% in local currency) for Q2 FY15 and 6% in U.S. dollars (11% in local currency) for the first six months of FY15, demonstrating consistent demand.
- Operating income increased by 7% year-over-year for Q2 FY15 and 8% for the first six months of FY15, indicating effective operational management.
- Diluted earnings per share (EPS) rose to $1.08 for Q2 FY15 and $2.37 for the first six months of FY15, up from $1.03 and $2.18 respectively in the prior year, showing improved profitability on a per-share basis.
- Strong growth was observed across key operating groups, with Communications, Media & Technology, Health & Public Service, and Products showing particularly robust local currency revenue increases.
- The company repurchased shares totaling $1.27 billion during the first six months of FY15, underscoring its commitment to returning capital to shareholders.
- Despite unfavorable currency fluctuations, which reduced reported U.S. dollar growth by approximately 7% for Q2 and 5% for the six-month period, the company's local currency growth remained strong.
- Accenture acquired Agilex Technologies, Inc. on March 25, 2015, to enhance its digital capabilities for the U.S. federal government, signaling strategic investment in growth areas.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2015, Accenture plc kept $0.09.
- Revenue$7.93B100.0%
- Cost of revenue−$5.69B71.8%
- Gross profit$2.24B28.2%
- Operating costs−$1.22B15.4%
- Operating income$1.02B12.9%
- Interest, other & tax−$330.3M4.2%
- Net income$690.7M8.7%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2015filed March 26, 2015Financial Statements
Q2 FY2015 against Q2 FY2014
| Line item | Q2 FY2015Q2 FY2014 | Change |
|---|---|---|
| Revenue | $7.93B$7.57B | +4.8% |
| Cost of Revenue | $5.69B$5.34B | +6.6% |
| Gross Profit | $2.24B$2.23B | +0.5% |
| Operating Expenses | $6.91B$6.62B | +4.4% |
| Operating Income | $1.02B$951.28M | +7.3% |
| Interest Expense | $3.90M$4.35M | −10.2% |
| Net Income | $690.73M$671.30M | +2.9% |
| EPS (Basic) | $1.10$1.06 | +3.8% |
| EPS (Diluted) | $1.08$1.03 | +4.9% |
| Shares Outstanding (Basic) | 628.25M635.93M | −1.2% |
| Shares Outstanding (Diluted) | 679.17M693.56M | −2.1% |
05—Questions
Frequently Asked Questions
What was Accenture's revenue performance in the reported quarter?
For the second quarter of fiscal year 2015, Accenture reported net revenues of $7.49 billion, a 5% increase in U.S. dollars and a 12% increase in local currency compared to the prior year period. For the first six months of fiscal year 2015, net revenues were $15.39 billion, a 6% increase in U.S. dollars and an 11% increase in local currency.
How did Accenture's profitability fare in this period?
Accenture's operating income increased by 7% to $1.02 billion for the second quarter and by 8% to $2.21 billion for the first six months of fiscal 2015. Diluted earnings per share (EPS) also saw positive growth, reaching $1.08 for the second quarter and $2.37 for the first six months, compared to $1.03 and $2.18 respectively in the prior year periods.
What factors are impacting Accenture's reported U.S. dollar revenue growth?
The company's reported U.S. dollar revenue growth is being impacted by unfavorable foreign currency exchange rate fluctuations. The U.S. dollar strengthened against many currencies, which reduced U.S. dollar revenue growth by approximately 7% for the second quarter and 5% for the first six months compared to local currency growth rates.
What is Accenture's strategy regarding capital allocation?
Accenture continues to prioritize capital allocation towards shareholder returns and strategic investments. During the first six months of fiscal 2015, the company spent $1.27 billion on share repurchases and paid $0.68 billion in dividends. They also completed several acquisitions, including Agilex Technologies, Inc., to enhance capabilities in key growth areas like digital services.
06—Continue