Accenture: A Major Job Creation Force

According to Everest Group’s Market Vista: Q1 2012, during the first quarter, the global outsourcing and offshoring market transaction volumes remained relatively flat with 441 outsourcing deals compared with 433 transactions signed a quarter ago. First quarter global transaction volumes increased 11% sequentially to an all-commodity volume of $3 billion, with growth being driven from business process outsourcing transactions, which reported an increase of 9% over the quarter. Analysts believe that the global outsourcing services market will remain steady in terms of transaction volumes until economic conditions stabilize.

Accenture’s Financials
Accenture’s (Nasdaq:ACN) Q3 revenues grew 6% over the year to $7.2 billion, ahead of the market’s projected revenues of $7.16 billion. By segment, consulting revenues remained flat at $3.97 billion, while outsourcing revenues grew 16% over the year to $3.19 billion. EPS of $1.03 was also ahead of the Street’s targeted earnings of $0.99 per share.

During the quarter, the company repurchased 10.7 million shares, with 9.8 million shares bought back in the open market for $653 million.

Accenture ended the previous quarter with more than 249,000 employees worldwide. It now has a pool of 154,000 employees in its Global Delivery Network. Utilization rates remained impressive despite being sequentially flat at 87% for the quarter. Attrition, excluding involuntary terminations, grew to 13% from 12% reported in the previous quarter. However, attrition was significantly less than the previous year’s 15%. Accenture maintained its guidance of hiring at least 60,000 people around the world this year.

For the current quarter, Accenture projected revenues of $6.6 million-$6.85 billion, marginally short of the Street’s target of $6.997 billion. Despite their concerns of the exchange rates impacting the current quarter earnings, EPS outlook for the year of $3.82-$3.90 was in line with analyst projections of $3.87.

Accenture’s International Expansion
Over the past quarter, Accenture has expanded its international footprint. Recently, the company opened a new SAP solutions center in Australia. The Melbourne-based center will be able to provide Accenture’s fully-scalable SAP solutions for Australian enterprise and government organizations.

In May 2012, Accenture opened similar SAP solution–focused innovation centers in Beijing, Tokyo, and Singapore to grow within the Asia Pacific markets. The innovation center for SAP solutions in Beijing will specialize in offering solutions for the communications, high tech, utilities, and retail industries and will focus on addressing growing energy demands in China. In China, as part of their consulting business, Accenture is already working with a major Chinese utility to develop a new smart grid strategy to build an eco-friendly smart grid that will be able to provide the population of more than one billion people with cost-efficient electricity.

The center in Tokyo will focus on solutions for high-tech companies and the electric power industry to cater to the growth of smart cities. The center in Singapore will focus on the consumer goods, utilities, oil & gas, and public sector industries and will be able to support clients in Malaysia, Indonesia, and Thailand.

The stock is trading at $56.63 with a market capitalization of $36.50 billion. It touched a 52-week high of $65.89 earlier last quarter.

This segment is a part in the series : Accenture