Accenture raises revenue forecast after strong second quarter

BENGALURU: Accenture Plc raised its full-year net revenue forecast well above analysts' expectations and reported better-than-expected quarterly revenue and profit, led by strong growth in its consulting business, especially in North America. Shares of the company, whose competitors include IBM Corp and India's Infosys Ltd and Tata Consultancy Services, rose as much as 5.1% to a record high of $113.18 in early trading on Thursday. Accenture has been investing heavily to boost its digital business, which offers analytics, content management, social media and cloud services to businesses.

"The company is very well positioned for newer, more discretionary projects, particulary around digital initiatives, where it's certainly taking share," Atlantic Equities analyst Christopher Hickey said. Accenture is also less exposed to the healthcare and banking industries than some of its competitors, Hickey told Reuters.

The company, which is incorporated in Ireland, said it now expected full-year net revenue to increase by 8-10% in local currency terms, up from its previous estimate of 6-9%.

That implies revenue of $33.53 billion-$34.15 billion, well above the average analyst estimate of $32.20 billion, according to Thomson Reuters I/B/E/S.

Revenue in the company's consulting division rose to $4.29 billion in the second quarter ended 29 February, an increase of 12% in dollar terms and 18% in local currency.

The business accounted for a little more than half of Accenture's revenue, with the rest coming from its outsourcing business. Outsourcing revenue was $3.65 billion, flat in dollar terms but up 6% in local currency.

Accenture's shares were up 3.3% at $111.29 in morning trading on the New York Stock Exchange. Up to Wednesday's close, Accenture's stock had risen nearly 18% in the past 12 months compared with a 0.5% increase in the S&P 500 IT Services index. Net revenue, or revenue before reimbursements, rose 6% in dollar terms and 12% in local currency terms, to $7.95 billion in the latest quarter.