Accenture reported strong financial results for the fourth quarter and full fiscal year ended Aug. 31, 2018 — thanks to its $3.4 billion worth of acquisitions in the last 3 years.
Accenture said its revenues were $10.1 billion (+11 percent) with operating margin of 14.3 percent in Q4.
Accenture’s revenues were $39.6 billion (+14 percent) with operating margin of 14.8 percent in fiscal 2018.
“We continue to benefit from the significant investments we have made to further strengthen our leadership position in high-growth areas such as digital, cloud and security services, which accounted for approximately 60 percent of total revenues for the year,” said Pierre Nanterme, chairman and CEO of Accenture.
Accenture has spent about $3.4 billion over the last three years — nearly half of it in fiscal 2017 — on some 70 acquisitions, to boost its digital and cloud services in order to compete better with Cognizant and IBM, Reuters reported.
Much of the company’s recent growth has been driven by these services, which include everything from managing clients’ social media marketing strategies to helping them move operations to the cloud.
Revenue from its digital, cloud and security-related services, which the company terms as “the New”, made up more than 60 percent of total revenue.
Main operating groups in fourth quarter
Accenture generated revenue of $2.09 billion (+15 percent) from Communications, Media & Technology, $2.01 billion (+3 percent) from Financial Services, $1.71 billion (+6 percent) in Health & Public Service, $2.80 billion (+12 percent) from Products and $1.52 billion (+20 percent) from Resources.
Accenture has clocked Q4 revenue of $4.71 billion (+11 percent) from North America, $3.44 billion (+10 percent) from Europe and $2 billion (+12 percent) from Growth Markets including India.
Accenture’s profit forecast for the year fell short of estimates, overshadowing better-than-expected fourth-quarter revenue and profit, Reuters reported .
The consulting and outsourcing services provider said the forecast assumes impact from a stronger dollar, and that the possibility of a “hard” Brexit and the ongoing trade war could impact its business.
The company said it expects full-year profit between $6.98 per share and $7.25 per share, below the average estimate of $7.28 per share. It also said it expects full-year revenue growth between 5 percent and 8 percent in local currency.
“Accenture reported solid numbers, driven by growth across all its segments. They provided FY19 guidance of 5-8 percent local currency revenue growth; and commented that the macro is incrementally more volatile, primarily due to disputes around global trade and the potential for a hard Brexit,” Arvind Ramnani, analyst at KeyBanc Capital Markets said.
Like its peers, Accenture has been focusing on cloud computing, cyber-security and analytics to reduce its reliance on IT services, where margins are falling as clients demand more work for less money.
Baburajan K
