The Clinton Herald, Clinton, Iowa

December 19, 2013

Technology consulting profits beat estimates as big data fuels demand

By Alex Barinka
Bloomberg News

NEW YORK — Accenture, the second-largest technology-consulting company, reported quarterly profit that topped estimates as demand for its expertise resurfaced in the U.S. and Europe.

Fiscal first-quarter earnings were $1.15 a share, topping the $1.09 average estimate of analysts surveyed by Bloomberg. Net sales rose 2 percent to $7.4 billion, the Dublin-based company said Thursday.

Bookings for consulting rose as customers ramped up investing in projects, with Europe recovering from its debt crisis and the U.S. Congress resolving its budget negotiations. Clients are seeking help on using newer technology like cloud computing and big-data analysis.

"Cloud, social, mobile and analytics -- those are all really important changes going on in the technology landscape," David Grossman, an analyst at Stifel Nicolaus & Co., said in an interview from San Francisco before the earnings release. "Initially, their customers can't implement newer technology without outside help because they don't have the talent or the knowledge base. That's usually good for Accenture."

Accenture raised its profit forecast for 2014 to $4.44 to $4.56 a share, up from the range of $4.42 to $4.54 a share the company gave in September, according to a statement Thursday. The forecast was adjusted to reflect foreign-exchange fluctuations. Analysts surveyed by Bloomberg predict earnings of $4.47 on average.

First-quarter net income attributable to Accenture rose to $751.8 million compared with $698.8 million a year earlier. Earnings per share, which are calculated using a different figure for net income, rose to $1.15 from $1.06.

Contract bookings rose 16 percent from a year earlier, according to data from Bloomberg Industries. Consulting, the company's biggest unit, recorded $4.3 billion in new business in the quarter, while outsourcing orders were $4.4 billion.

Accenture is considered a bellwether for the information- technology market because its earnings cycle ends one month sooner than competitors.

International Business Machines Corp., the largest technology-services provider, is scheduled to announce earnings Jan. 21. Cognizant Technologies Solutions Corp., one of the largest providers of outsourcing services, normally reports quarterly results in February.