Accenture Lowers Fiscal 2009 Forecasts; Shares Fall – Bloomberg
SOURCE: Bloomberg
DATE: March 27th, 2009
Mohit Soapbox:
Accenture which has till the last quarter continued to show a strong face relative to the slowdown it’s competitors and Indian vendors were facing seems to have succumbed to the downturn. Their US based business seems to have been affected and overall in the marketplace discretionary spend might as well not exist. Consulting dollars are the first to go and that is showing an affect on Accenture.
A number of the other vendors like Infosys, Wipro, Genpact which till last couple of quarters were showcasing growth of their ‘transformation’ business has seen that well run dry. During survival times transformation is not where the folks want to spend money, for that matter spend any money .
A number of these players have seen scope contracts, delayed decision making and reduction in scope of services during this period.
Accenture like it’s competitor IBM has a global presence and like any other business continues to re allign and distribute their workforce to deal with the reduced market demand.
Accenture Ltd., the world’s second- largest technology-consulting firm, lowered its forecasts for 2009 profit and sales as customers curb orders in the recession. The shares fell as much as 11 percent in after-hours trading.
Sales will increase a maximum of 4 percent this year, down from a previous forecast of as much as 10 percent, the Hamilton, Bermuda-based company said today in a statement. Profit will be $2.60 to $2.67 a share, less than its earlier outlook for at least $2.78.
While Accenture reported an increase in outsourcing bookings in the quarter ended Feb. 28, consulting bookings dropped 17 percent from a year earlier as companies tightened their purse strings. Customers pushed back projects after the economic slump put them in a “state of shock,” Chief Executive Officer Bill Green said today in an interview.
“Most companies are just getting a grip on what their ‘09 looks like,” he said. “All that now is just settling in.”
Accenture dropped as much as $3.46 to $28.50 in extended trading after closing up 35 cents to $31.96 on the New York Stock Exchange. The stock has lost 2.5 percent this year.
New bookings in 2009 will be between $23 billion and $25 billion, Accenture said. It previously expected $24 billion to $27 billion.
Net income in the third quarter rose to $411.4 million, or 63 cents a share, from $406.6 million, or 64 cents, a year earlier. Sales dropped 6.6 percent to $5.66 billion, hurt partly by currency-exchange fluctuations.
New Bookings
Total new bookings in the three-month period fell 7.1 percent to $5.98 billion from the year-ago period. Consulting bookings dropped to $3.14 billion, while outsourcing contracts gained 7.2 percent to $2.84 billion, the company said.
“It was a little worse than feared,” said Jamie Friedman, an analyst at Susquehanna Financial Group in New York, who rates Accenture shares “neutral.” “Consulting is discretionary. It’s a great thing to have, but it’s the first thing to go when you don’t have better visibility on your own business.”
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