Accenture Higher on Q4 Beat, Guidance

Accenture reported fiscal Q4 net income fell 8.6% to $316.8 million, or $0.50/share, less than analysts had forecast ($0.48/share). EPS would have been $0.39 last year excluding a tax benefit. Revenues rose 27% to $5.57B, well ahead of estimates of $4.89B. Accenture projects fiscal 2008 EPS of $2.21 to $2.26, on revenue growth of 9% to 12% or as much as $24B. Analysts were expecting $2.22 on sales of $21.4B. Fiscal Q1 revenues are seen in the range of $5.4B to $5.6B, also ahead of estimates of $5.24B. During the company's conference call, COO Steve Rohleder said, "The subprime market issues has had no impact on our business to date, although we continue to monitor the situation." (See earnings call transcript). CEO William Green called subprime an "isolated phenomenon." Green also explained the sustainability of Accenture's consulting business, saying the focus is on longer-term strategic issues of clients, instead of small discretionary projects. Consulting accounted for $3.1B (63%) of $4.9B in new bookings (outsourcing totaled 37%). Accenture raised its quarterly dividend 20% to $0.42. CFO Pam Craig said Accenture, with $3.31B in cash, will probably focus on stock buybacks and acquisitions. Shares of Accenture rose 0.6% to $38.02 during normal trading Thursday and added 1.3% to $38.52 in extended activity.

Sources: Press release, Bloomberg, MarketWatch, TheStreet.com
Commentary: Which IT Outsourcing Stock is the Best? • Goldman Updates Favorite Tech Stocks Lists • Another Look at Accenture's Market Cap
Stocks/ETFs to watch: ACN. Competitors: EDS, IBM. ETFs: MTK

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