Market Share Gains Help Drive Accenture Plc Earnings Higher

By Markets

Image source: Accenture.

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Accenture (NYSE: ACN) reported fourth-quarter results on Sept. 29. The business consulting and services company continues to win new business at an impressive clip.

Accenture results: The raw numbers


Q4 2016

Q4 2015

Growth (YOY)

Net revenue

$8.5 billion

$7.9 billion


Adjusted net income

$881 million

$788 million


Adjusted earnings per share




Data source: Accenture Q4 2016 earnings press release. YOY = year over year.

What happened with Accenture this quarter?

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Net revenue rose 8% year over year (9% in local currency) to $8.5 billion, with consulting net revenue increasing 11% to $4.6 billion and outsourcing net revenue rising 4% to $3.9billion.New bookings were solid at $9 billion, including consulting bookings of $4.8billion and outsourcing bookings of $4.2billion.Operating income increased 9% to $1.2 billion, improving to 14.1% of net revenues, compared to 13.9% in the prior-year quarter.

All told, earnings per share -- adjusted to exclude gains related to asset sales -- rose 14% to $1.31. Additionally, operating cash flow jumped 37% year over year to $2.1 billion, and free cash flow surged 40% to $1.9billion.

What did management have to say?

"We are very pleased with our excellent financial results for both the fourth quarter and the full fiscal year 2016," said Chairman and CEO Pierre Nanterme in a press release. "For the year, we delivered double-digit revenue growth in local currency and gained significant market share, generated strong new bookings, expanded operating margin, and delivered outstanding earnings per share. We also generated excellent free cash flow and returned more than $4 billion in cash to our shareholders."

Looking forward

For the first quarter, Accenture expects net revenue in the range of $8.4billion to $8.65billion, which would represent year-over-year growth of 5% to 8% in local currency.

The company also issued its fiscal 2017 full-year forecast, including:

  • Net revenue growth of 5% to 8% in local currency.
  • Operating margin of 14.7% to 14.9%.
  • EPS of $5.75 to $5.98.
  • Operating cash flow of $4.6 billion to $4.9 billion.
  • Free cash flow of $4billion to $4.3billion.

"Our durable and balanced performance demonstrates that our growth strategy continues to resonate with the needs of our clients, and that we are clearly executing very well," added Nanterme. "Looking ahead, we will continue to invest in high-growth areas across Accenture -- with a particular focus on digital, cloud and security services, which accounted for approximately 40 percent of our revenues in fiscal 2016. With the differentiated capabilities we have built and the disciplined management of our business, we are well-positioned to continue driving sustainable, profitable growth and delivering value for our clients and shareholders."

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Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends Accenture. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.