Accenture profit slips below expectations

December 17, 2015

Accenture PLC said profit declined in its latest quarter, thanks to a higher tax rate and the impact of a stronger U.S. dollar, though revenue topped expectations.

Accenture’s earnings have grown steadily in recent years, driven by performance in both its outsourcing and consulting businesses. Accenture was tapped last year to help fix the HealthCare.gov website, and last December the company said it won a five-year, $563 million contract to continue its work on the federal insurance site.

Digital revenue has soared as the company has moved to boost its cloud services, and earlier this year the company agreed to buy cloud-computing consultancy Cloud Sherpas, which helps companies implement Google Inc. and Salesforce.com Inc. technologies. Accenture is focused on rotating its business to digital, cloud and security services, Chief Executive Pierre Nanterme said Thursday. (Wall Street Journal)

Overall revenue edged 1.5% higher to $8.47 billion, above the $7.7 billion to $7.95 billion the company projected. Adjusted for currencies, sales rose 10%.

Accenture reported a profit of $858.5 million, or $1.28 a share, down from $882.2 million, or $1.29 a share, a year earlier. Analysts projected $1.32 in earnings per share, according to Thomson Reuters.

The company said a higher effective tax rate hit earnings by 7 cents. That rate rose to 29.3% in the quarter, from 25.1% a year earlier.

Shares in the company, up 21% this year, were inactive premarket. (Market Watch)

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