Outsourcing Boosts Accenture's First Quarter Sales And Profits - InformationWeek

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Software // Enterprise Applications

Outsourcing Boosts Accenture's First Quarter Sales And Profits

Sales of application development, infrastructure management, and other IT and business services rose 18%, while consulting sales increased 8%.

Bermuda-based services giant Accenture on Thursday reported strong growth in first quarter earnings and net income, and said revenues were its highest ever during a three-month period. "We're on the right trajectory," Accenture CEO William Green said in a statement.

Revenues increased 12% to $4.17 billion. Per-share earnings rose 20% to 36 cents and net income jumped 10% to $214.9 million. New contract bookings during the period were $5.54 billion, Accenture's highest in seven quarters. "We continue to build momentum," said Green.

Booming sales of outsourcing services helped drive Accenture's first quarter gains. The company said sales of application development, infrastructure management, and other IT and business services rose 18%. Consulting sales, which account for just under two-thirds of Accenture's total revenues, increased 8%.

Cindy Shaw, who tracks Accenture for investment bank Moors & Cabot, said in a report that Accenture's first quarter results show that the company's "offshore and industrialization" initiatives are paying off. Like most IT services vendors, Accenture is shifting a significant amount of work to low-cost countries like India and China.

Shaw raised one note of caution: The company's implementation of a $3 billion contract to help revamp the U.K.'s national health system has been hampered by delays. "It bears watching," said Shaw.

In early market activity Friday, Accenture's shares were trading at just above $30 per share, a two-year high. The company said it expects full year per-share earnings to fall between $1.52 and $1.57.

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