Accenture plc (NYSE: ACN) cut projected revenue growth for its fiscal year ending Aug. 31, the company announced. It now expects revenue to grow between 3 percent and 4 percent in local currency; that’s down from an earlier estimate in the lower half of a range of 5 percent to 8 percent.
The report on full-year growth came June 27 as the company announced earnings for its fiscal third quarter ended May 31 came slightly below projections.
Third-quarter net revenue at Accenture rose 1 percent — 3 percent in local currency — to $7.20 billion. However, Accenture’s guidance had called for revenue growth of between $7.25 billion and $7.50 billion.
“Our results in the third quarter of fiscal 2013 were solid overall,” said then CFO Pamela Craig in a conference call on June 27. “Although revenue growth of 3 percent was slightly below our March outlook range, and we now expect this trend of slower revenue growth to continue as we finish out our fiscal year. Bookings continue to reflect strength in demand for future transformational services, particularly in outsourcing, and bookings were lighter overall than we expected in consulting.”
New consulting bookings totaled $3.9 billion in the third quarter, and outsourcing bookings totaled $4.4 billion.
“Our revenue growth in consulting was not at the level we expected this quarter,” Craig said in the call. “First, consulting bookings were almost $400 million lower than we expected in March, including a decline in smaller contracts that convert to revenue more quickly. This was the primary factor that negatively impacted our revenue growth this quarter. A second factor relates to the continuing trend of how our bookings are converting to revenue. Our outlook for Q3 assumed a continuation of the slower conversion we have discussed in recent previous quarters. However, we saw an unexpected uptick in the average duration of our new bookings.”
Consulting net revenue was $3.87 billion in the third quarter, an increase of 2 percent in U.S. dollars and flat in local currency, according to a filing with the U.S. Securities and Exchange Commission. Outsourcing net revenue rose 4 percent in U.S. dollars to $3.33 billion. The increase was 7 percent in local currency.
However, overall third-quarter gross margin at Accenture improved to 33.9 percent from 33.1 percent in the same period in the previous year.
Third-quarter net income rose 14.6 percent to $874.1 million in the third quarter. Net income includes a favorable impact from a $50 million reorganization benefit.
Accenture is a global provider of management consulting, technology services and outsourcing.
The company also announced that Craig will retire effective Aug. 31, and that David Rowland has assumed the role of CFO. Rowland most recently served as senior vice president - Finance.
Accenture also announced that Richard Clark was appointed chief accounting officer effective Sept. 1 in addition to his current role as corporate controller. Clark will succeed Anthony Coughlan, who will continue to lead a number of key finance initiatives and report to Rowland.