June 27, 2019 / 11:04 AM / 5 months ago

Accenture's fall in bookings dampens upbeat quarterly profit, forecast

(Reuters) - Consulting and outsourcing services provider Accenture Plc (ACN.N) reported a 9% fall in quarterly bookings on Thursday, overshadowing better-than-expected third-quarter results and an upbeat full-year forecast.

FILE PHOTO: Visitors look at devices at Accenture stand at the Mobile World Congress in Barcelona, February 26, 2013. REUTERS/Albert Gea/File Photo

New bookings at the company, which gets about half of its revenue from outside the United States, were $10.6 billion, down from $11.7 billion in the year ago quarter, due to a 4% hit from a stronger dollar.

“We suspect bookings will be back in the spotlight despite sound reported results,” Darrin Peller, an analyst from Wolfe Research said.

On a post-earnings call with analysts, Chief Financial Officer KC McClure said she expected bookings to recover in the current quarter.

“As you know, quarterly bookings can be lumpy... Looking forward, we have a very strong pipeline, and we expect strong bookings in Q4,” McClure said.

Shares of the company, which competes with Cognizant (CTSH.O) and major Indian IT companies such as Tata Consultancy Services (TCS.NS) and Wipro (WIPR.NS), were down 1.4% in afternoon trading.

For the third quarter, Accenture’s net income rose about 20% to $1.25 billion, or $1.93 per share, and beat analysts’ average estimate of $1.89, according to IBES data from Refinitiv.

The beat was driven by the company’s focus on digital and cloud services, which include everything from managing clients’ social media marketing strategies to helping them move to the cloud, as the IT services industry struggles with falling margins.

Revenue from digital, cloud and security-related services, which Accenture calls “the New”, contributed more than 60% of its total revenue in the third quarter.

“All of our growth, and this is by design, comes from our rotation to “the New,” interim Chief Executive Officer David Rowland said.

Revenue rose to $11.10 billion from $10.69 billion, ahead of analysts’ average estimates of $11.04 billion.

For the full-year, the Dublin, Ireland-based company now expects revenue growth to be in the range of 8% to 9%, compared with previous forecast of a growth of 6.5% to 8.5%. It expects to post profit between $7.28 per share to $7.35 per share, up from $7.18 to $7.32 per share it estimated earlier.

Up to Wednesday’s close, Accenture’s shares have risen 30% this year, higher than the 20% gains of the five-member S&P 500 IT Consulting & Other Services .SPLRCTKCS index.

(The story corrects CFO’s name in the fourth paragraph to KC McClure.)

Reporting by Vibhuti Sharma and Sayanti Chakraborty in Bengaluru; Editing by Shailesh Kuber

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