Shares in IT services giant Accenture Ltd fell more than 12% yesterday, despite the company stating that it expects its revenue to reach the $15 billion mark in its latest financial year.
The Hamilton, Bermuda-based company expects to grow sales by between 9% to 12% in the year to August 2005, which would take it to revenue of between $14.9 billion to $15.3 billion during the period.
However, the forecast disappointed investors that had been expecting a growth target of between 10% to 15%. Accenture also said that full-year 2005 bookings would reach $18 billion to $20 billion – flat to down on fiscal 2004, driven by a move away from mega outsourcing deals and towards multi-sourced contracts.
Accenture’s shares fell 12% to $23.35 in morning trading on the New York Stock Exchange following the announcement.
The forecast underlines the general sentiment of the IT services community that the sector is about to enter a period of modest growth, after the market’s post-Y2K decline stabilized during the last 18 months.
In the three months to August 31, 2004, Accenture increased net profit 52% to $183 million on revenue before reimbursements that grew 10% to $3.42 billion. New bookings during the quarter increased 7% to $4 billion.
Accenture said that it grew revenue across all five of its main operating groups and in its three main geographic regions during the quarter, as well as in the full-year period.
Accenture’s fastest-growing operating unit was financial services, where sales increased 21% in local currency to $715 million. The company’s largest vertical market was communications and high tech, which accounted for 27% of total revenue.
The company made the largest chunk of its sales in the EMEA region, where revenue grew 17% to $1.66 billion in the quarter. Revenue from the Americas increased 1% to $1.5 billion, and sales from Asia Pacific grew 22% to $258 million.
In the full-year period, Accenture’s net profit grew 39% to $690 million on sales before reimbursements that rose 9% to $13.67 billion. New bookings increased to $20.1 billion from $16.1 billion in the previous year driven by new deals with clients including Best Buy and Barclays.
William Green, who became Accenture’s new chief executive in September, said that he was encouraged by gains in both consulting and outsourcing, the latter of which now accounts for 37% of the company’s total revenue.
Consulting sales in the full-year period were flat in the full-year period at $8.59 billion, although this represented growth of 7% in US dollars. Outsourcing sales rose 28% to $5.08 billion.