According to market researcher, Source Information Survey, the U.S. market for management consulting reported growth of 8.5% last year to $39.3 billion. This growth was driven by consulting services for marketing and sales, which grew 26% during this period, followed by operational improvement consulting business, which reported growth of 11.3%. IT consulting services market grew 10.1% during the year.
Accenture's (NYSE:ACN) Q1 revenues grew 2% over the year to $7.36 billion, ahead of the Street's projections of $7.25 billion. EPS of $1.15 grew from previous year's $1.06 and was ahead of the market projections of $1.09.
By segment, outsourcing revenues grew 5% over the year to $3.42 billion. Consulting revenues fell 1% to $3.94 billion. Revenues from Health & Public Services grew 5% to $1.23 billion and revenues from Financial Services grew 2% to $1.60 billion. Product revenues grew 6% to $1.80 and revenues were flat at $1.32 billion. Communications, Media & Technology revenues fell 3% to $1.41 billion.
By region, revenues from the Americas and EMEA both grew 3% over the year, while revenues from Asia Pacific were down 6% over the year.
The company ended the quarter with 281,000 employees, and utilization fell marginally from 88% a year ago to 87% during the quarter. Attrition remained flat over the year at 11%. Accenture projects to hire another 60,000 employees during the year.
For the current quarter, the company is projecting revenues of $6.95-$7.25 billion, falling short of the market's projections of $7.28 billion. For the fiscal, it projects earnings of $4.44-$4.56 compared with the Street's target of $4.46.
Accenture continued inorganic growth and recently completed the acquisition of independent international consulting and systems integration group, PCO Innovation. PCO specializes in end to end services product life-cycle management (PLM) software technologies that help in bringing to market products and services at a faster pace. The acquisition will help strengthen Accenture's PLM capabilities. Terms of the deal were not disclosed.
In October 2013, Accenture spent an estimated $375 million for the acquisition of King of Prussia, Pennsylvania-based Procurian. Procurian is a procurement business process outsourcing company with strong analytics and technology skills and an impressive client list that includes Hertz (NYSE:HTZ) and Kimberly Clark (NYSE:KMB). They have operations in the U.S., India, the U.K., the Czech Republic, China and Brazil. The move will help Accenture strengthen their services in the segment across industries including manufacturing, consumer goods, high-tech and financial services.
Last month, Accenture also announced the acquisition of the industrial and embedded software development and services business of Evopro group. Evopro is a Budapest-based software development and engineering services company and provides embedded software used in medical equipment, automotive, building, logistics and transportation industries. It has a presence in Germany, Hungary, Romania, and Turkey. The acquisition will help enhance Accenture's industrial software and automation market skills along with international expansion.
The stock is trading at $80.47 with a market capitalization of $54.47 billion. It touched a 52-week high of $84.22 in May 2013.