Accenture results beat estimates on strong demand for outsourcing


Accenture Plc reported first-quarter results that beat analysts' estimates as increased demand for outsourcing services helped to offset a drop in income from its consulting business.

Accenture's shares rose 3 percent to $78.01 before the bell on Thursday.

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The company's consulting business has been hit in the past few quarters as companies cut down on discretionary spending, resulting in fewer large deals.

Revenue from consulting, the bigger of Accenture's two businesses, has declined in five of the last six quarters. The company did report a rise in revenue from the business in the fourth quarter but said it was too early to say if that was sustainable.

Accenture said income from the consulting business fell 1 percent to $3.94 billion in the first quarter ended November 30.

Rival IBM said in October revenue from its services business, which consists of consulting and application management, was flat in the third quarter.

Accenture forecast current-quarter revenue below estimates. The company said it expected second-quarter revenue of $6.95 billion to $7.25 billion, below the average analyst estimate of $7.28 billion, according to Thomson Reuters I/B/E/S.

However, the company raised its earnings forecast range for the year ending August 31 by 2 cents to $4.44 to $4.56 per share, saying it sees less impact from foreign exchange rates.

Net income rose to $811.6 million, or $1.15 per share, in the first quarter from $766 million, or $1.06 per share, a year earlier.

Revenue rose to $7.36 billion from $7.22 billion. Outsourcing revenue increased 5 percent to $3.42 billion.

Analysts on average had expected earnings of $1.09 per share on revenue of $7.25 billion for the quarter ended November, according to Thomson Reuters I/B/E/S.

(This story has been refiled to correct paragraph 8 to say the company raised its earnings forecast to $4.44 to $4.56 per share, not $4.42 to $4.54)

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)