Ac­cen­ture falls af­ter sales beat es­ti­mates

The Pak Banker - - 6BUSINESS -

Ac­cen­ture Plc (ACN), the world’s sec­ond- largest tech­nol­ogy-con­sult­ing com­pany, fell in early trad­ing af­ter fore­cast­ing third-quar­ter sales that fell short of an­a­lysts’ es­ti­mates.

Rev­enue will reach $7.25 bil­lion to $7.5 bil­lion in the quar­ter that ends in May, the Dublin-based com­pany said to­day in a state­ment. That missed the $7.58 bil­lion av­er­age es­ti­mate of an­a­lysts com­piled by Bloomberg.

Af­ter reach­ing a record ear­lier this month, Ac­cen­ture shares have dropped on spec­u­la­tion that busi­nesses are hold­ing back on tech­nol­ogy spend­ing, said Arvind Ram­nani, an an­a­lyst at BNP Paribas SA in New York. Or­a­cle Corp. (ORCL)’s quar­terly re­sults missed earn­ings ex­pec­ta­tions last week, ex­acer-

in­vestors’ con­cern, he bat­ing said.

“The third quar­ter maybe is a lit­tle bit lighter than what I was look­ing for,” Ram­nani said of Ac­cen­ture’s ex­pec­ta­tions. The com­pany also said its rev­enue for the full year would be at the lower end of its pre­vi­ous forecast for 5 per­cent to 8 per­cent growth.

The shares were down 2.2 per­cent to $73.25 at 8:04 a.m. in New York. Through yes­ter­day, they had fallen 4.4 per­cent since hit­ting a record of $78.35 on March 8.

The sales ex­pec­ta­tion marred a quar­terly report that sur­passed an­a­lysts’ ex­pec­ta­tions for profit and was in line with them for sales, helped by a gain in spend­ing by cor­po­rate cus­tomers for its ad­vice.

Sec­ond-quar­ter net in­come rose to $1.1 bil­lion, or $1.65 a share, com­pared with $643.9 mil­lion, or 97 cents, a year ear­lier. Ex­clud­ing some items, earn­ings was $1 a share. An­a­lysts had pre­dicted 97 cents, ac­cord­ing to data com­piled by Bloomberg.

Ac­cen­ture’s sales growth has been out­per­form­ing In­ter­na­tional Busi­ness Machines Corp. (IBM), the largest provider of tech­nol­ogy con­sult­ing, which saw that unit shrink 2 per­cent in 2012. Clients are choos­ing con­tracts over longer pe­ri­ods, which may lead to more sta­ble earn­ings even if the deals don’t pro­duce rev­enue as quickly, Ram­nani said.

“Even­tu­ally it in­creases the level of sta­bil­ity in the busi­ness,” said the an­a­lyst, who has a hold rat­ing on the stock. “The chance of projects get­ting can­celed or de­layed is prob­a­bly be­ing re­duced.”

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