Accenture shrugs off tough time in consulting with other growth

 
City A.M. Reporter
ACCENTURE’S first-quarter results beat analysts’ estimates yesterday as increased demand for outsourcing services helped to offset a drop in income from its consulting business.

The company’s consulting business has been hit in the past few quarters as companies cut down on discretionary spending, resulting in fewer large deals.

Revenue from consulting, the bigger of Accenture’s two businesses, has declined in five of the last six quarters.

The company reported a rise in revenue from the business in the fourth quarter but said it was too early to say if that was sustainable.

Accenture said income from the consulting business fell one per cent to $3.94bn for the quarter to the end of November.

However, the company raised its earnings forecast range for the year ending 13 August by 2 cents to $4.42 to $4.54 per share, saying it sees less impact from foreign exchange rates.

Net income rose to $811.6m in the first quarter from $766m a year earlier. Revenue rose to $7.36bn from $7.22bn. Outsourcing revenue increased five per cent to $3.42bn.

“They’ve set the stage well for their fiscal 2014. Now they need to execute,” Edward Jones analyst Josh Olson said.