Accenture reported Q1 earnings
I knew that ACN was publicly traded, but never bothered to look at the numbers. Here is what I found in their10Q.
- Q1 Revenues of $7.22 billion, up 2% YoY
- Q1 Operating income of $1.05 billion, up 7% YoY
- Q1 Net income of $698 million
- Cash balance of $5.7 billion
- DSO (days sales outstanding) of 32 days
ACN keeps growing
Looking at the Investor 2012 presentation from October 2012, ACN had a 8% CAGR between (2004-2012) which was almost double the industry average.
Their operating margin was 14.5% and net margin was an impressive 9.6%. Looking at the comparison here, you can see that ACN is more profitable than both Booz Allen (3.8%) and Towers Watson (7.5%).
In the annual chart below, margins continues to expand from 12.7% in 2007 to 14.5% in Q1 2013. (For blog readers: look at the misleading axis on the left)
They did say in their Q1 press release here, that utilization of billable employees was 88%, and attrition was 11%. To me, that means consultants are hard working, and also getting burned out. Typical consulting model.
Earnings are up
Earnings per share (EPS) grew at a phenomenal 15% CAGR for eight years. Most of the growth came from revenue grow and share buybacks.
The stock had a good run-up from the recent low in July near $56. It made it up to $71, but then dropped with the recent earnings release and outlook. For the updated stock price look here.
In Q1, America and Asia Pacific saw revenues increase, while Europe / Middle East / Africa was down by 6% in US $ terms.
All industry groups were flat or up in revenues YoY in Q1, with the exception of Media and Telecom. I wonder if that means fewer promotions in that service area in 2013.
Investor relations presentations are a great way to peak behind the curtain and see what management is telling investors about their strategy and investments. Here, Accenture showed that their big opportunities were in Analytics, Health, Mobility, and Software-related services. If you want to read the words that accompany the slides, look here.
Here is the surprise. Looking at the numbers, outsourcing is 45% of their business and growing fast. As Bloomberg reported here, “Outsourcing sales rose 9 percent to $3.26 billion as more customers hired Accenture to cut costs by shifting work overseas.” It is a Flat World and getting flatter, faster.
