Software giant Accenture PLC (NYSE: ACN) reported better-than-anticipated fiscal 2022 fourth-quarter earnings and revenues. However, the consulting firm, citing sluggishness in spending by enterprises, issued slightly weaker-than-anticipated fiscal 2023 first-quarter revenue guidance. The company also issued a mixed FY 2023 view. Still, the stock managed to gain 1.17% or $3.10 to close Thursday’s trading at $262.32.
Dublin, Ireland-based Accenture reported fourth-quarter revenues of $15.42 billion, an increase of 14.90% from $13.42 billion in the similar period last year.
For the quarter that ended August 31, 2022, the company posted a net income of $1.67 billion, or $2.60 per share, compared with $1.42 billion, or $2.20 a share, in the quarter that ended August 31, 2021.
Analysts surveyed by Refinitiv had anticipated Accenture to report earnings of $2.57 per share on revenues of $14.39 billion.
Commenting on the quarterly results, Julie Sweet, chair and CEO of Accenture, said, “Our exceptional performance in fiscal 2022 is a testament to our ability to create enduring 360° value for all our stakeholders: clients, people, shareholders, partners, and communities.”
Consulting revenues rose by 14% y-o-y to $8.33 billion in 4Q 2022. Outsourcing revenue was $7.09 billion, an increase of 16% from last year.
Segment wise,
- Communications, Media & Technology revenues were $3.08 billion, up 16% from the previous year.
- Financial services revenues increased 13% to $2.94 billion.
- Health & Public Service revenues surged 15% y-o-y to $2.892 billion.
- Product revenues were $4.478 billion, an increase of 16% on a y-o-y basis.
- Resources revenues jumped 13% to $2.03 billion.
Fresh orders (bookings) for FY 2022 were $71.70 billion, up 21% from FY 2021. In particular, consulting bookings represented 53% ($37.90 billion) of total bookings. Obviously, outsourcing bookings accounted for 47% (or $33.90 billion) of overall fresh orders.
Looking forward, the company forecasts 1Q 2023 revenues of between $15.20 billion and $15.75 billion. Wall Street is forecasting revenues of $16.06 billion for the current quarter.
For FY 2023, Accenture forecasts earnings of between $11.09 and $11.41 per share. The company also expects revenue growth in the range of 8% to 11%. Analysts polled by Refinitiv had forecast the company to post earnings of $12 per share on revenues of $66.45 billion, translating to a growth of 7.60% on a year-over-year basis.
The company’s Board has declared a dividend of $1.12 per share, reflecting an increase of 15%, payable on November 15. Additionally, Accenture has also announced an additional share repurchase program worth $3 billion, taking the aggregate outstanding value of the share repurchase program to $6.10 billion.
Accenture stated that it anticipates returning a minimum of $7.10 billion to shareholders in the form of dividends and share repurchases in FY 2023.
The quarterly earnings beat and slightly weaker first-quarter revenue outlook are expected to keep the stock of Accenture range bound with a slight bearish bias in the near term.
The historical price chart indicates that the stock of Accenture is declining after testing the resistance at 320. The next major support is anticipated only near 240. Additionally, the stock is trading below its 50-day moving average while the stochastics indicator is in the bearish zone. Therefore, we are anticipating the stock to remain in a downtrend in the days ahead.
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