Post Earnings Coverage as Accenture’s Quarterly Revenue Increased 6% in Constant Currency

Upcoming AWS Coverage on Internap Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 5, 2017 / Active Wall St. announces its post-earnings coverage on Accenture PLC (NYSE: ACN). The Company announced its second quarter fiscal 2017 financial results on March 23, 2017. The consulting Company exceeded earnings expectations. Register with us now for your free membership at:

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One of Accenture’s competitors within the Information Technology Services space, Internap Corp. (NASDAQ: INAP), reported on March 09, 2017, its financial results for Q4 2016. AWS will be initiating a research report on Internap in the coming days.

Today, AWS is promoting its earnings coverage on ACN; touching on INAP. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended February 28, 2017, Accenture’s revenues before reimbursements (net revenues) were $8.32 billion compared with $7.95 billion for Q2 FY16, an increase of 5% in US dollars and 6% in local currency over the same period last year, and within the Company’s guided range of $8.15 billion to $8.40 billion. The foreign-exchange impact for the quarter was approximately negative 2%. The Company’s revenue numbers missed analysts’ consensus of $8.34 billion.

For Q2 FY17, Accenture’s consulting net revenues were $4.41 billion, up 3% in US dollars and 5% in local currency compared with Q2 FY16. The Company’s outsourcing net revenues were $3.91 billion, representing an increase of 7% in US dollars and 8% in local currency on a y-o-y basis.

Accenture’s gross margin for Q2 FY17 was 30.1% compared with 29.8% for Q2 FY16. The Company’s operating income for the reported quarter increased 5% to $1.14 billion, or 13.7% of net revenues, compared with $1.09 billion, or 13.7% of net revenues, in the year earlier comparable period.

For Q2 FY17, Accenture reported net income of $887 million, or diluted earnings per share of $1.33, compared with net income of $1.40 billion, or $2.08 for Q2 FY16, which included a $0.74 gain on the sale of Navitaire. Excluding the $495 million after-tax impact of the gain on the sale of Navitaire, net income for Q2 FY16 was $905 million. The Company’s earnings numbers exceeded market estimates of $1.30 per share.

New Bookings

Accenture’s new bookings for Q2 FY17 were $9.2 billion and reflect a negative 2% foreign-currency impact compared with new bookings in the year earlier same quarter. The Company’s new bookings from Consulting totaled $4.6 billion, or 50% of total new bookings. Outsourcing new bookings for the reported quarter were also $4.6 billion, or 50% of total new bookings.

Cash Flow & Balance Sheet

For Q2 FY17, Accenture’s operating cash flow was $155 million and property and equipment additions were $104 million compared to operating cash flow of $364 million and property and equipment additions of $148 million in Q2 FY16. The Company’s free cash flow was $50 million for Q2 FY17 and $1.05 billion year-to-date compared to $216 million and $765 million for the same periods last year.

Accenture’s Days services outstanding, or DSOs, were 42 days at February 28, 2017, compared with 39 days at August 31, 2016 and 39 days at February 29, 2016. As of February 28, 2017, Accenture’s total cash balance was $3.2 billion compared with $4.9 billion at August 31, 2016.

Returning Cash to Shareholders

Accenture PLC declared a semi-annual cash dividend of $1.21 per share on its Class A ordinary share for shareholders of record at the close of business on April 13, 2017, and Accenture Holdings plc declared a semi-annual cash dividend of $1.21 per share on Accenture Holdings’ ordinary shares for shareholders of record at the close of business on April 10, 2017. These dividends are both payable on May 15, 2017.

Share Repurchase Activity

During Q2 FY17, Accenture repurchased or redeemed 7.0 million shares, including 5.2 million shares repurchased in the open market, for a total of $816 million. This brings Accenture’s total share repurchases and redemptions for H1 FY17 to 12.0 million shares, including 9.1 million shares repurchased in the open market, for a total of $1.40 billion. The Company’s total remaining share repurchase authority at February 28, 2017, was approximately $4.3 billion.

Business Outlook

For Q3 FY17, Accenture expects net revenues to be in the range of $8.65 billion to $8.90 billion, a 5% to 8% growth in local currency, reflecting the Company’s assumption of a negative 2.5% foreign-exchange impact on a y-o-y basis.

For FY17, the Company now expects net revenue growth to be in the range of 6% to 8% in local currency compared with 5% to 8% previously.

Accenture now expects diluted GAAP EPS to be in the range of $5.31 to $5.48, including the impact of the settlement charge. Excluding the settlement charge, the Company now expects EPS to be in the range of $5.70 to $5.87 compared with previously announced range of $5.64 to $5.87.

Accenture is forecasting GAAP operating margin for FY17 to be in the range of 13.5% to 13.7% Excluding the settlement charge, the Company continues to expect operating margin to be in the range of 14.7% to 14.9%, an expansion of 10 to 30 basis points from FY16.

For FY17, Accenture is forecasting operating cash flow to be in the range of $4.6 billion to $4.9 billion; property and equipment additions to be $600 million; and free cash flow to be in the range of $4.0 billion to $4.3 billion.

Stock Performance

At the close of trading session on Tuesday, April 04, 2017, Accenture’s share price finished yesterday’s trading session at $118.04, marginally up by 0.34%. A total volume of 1.69 million shares exchanged hands. The stock has advanced 5.52% in the past twelve months. Furthermore, since the start of the year, shares of the Company have gained 0.78%. The stock is trading at a PE ratio of 19.67 and has a dividend yield of 2.05%.

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