Accenture profit falls 41 %

NEW YORK — Consulting and outsourcing firm Accenture PLC posted a 41 percent drop in fiscal fourth-quarter profit Thursday, as revenue fell across nearly all business groups and the company recorded a hefty restructuring charge.

Accenture also said it will raise its cash dividend by 50 percent to 75 cents per share. Payments will be semiannual, instead of annual, starting in the third quarter of 2010, the company said. The board also authorized the repurchase of $4 billion additional shares.

For the three months ended Aug. 31, the company earned $254.7 million, or 39 cents per share. That compared with $434.8 million, or 67 cents per share, in the year-ago period. Excluding a restructuring charge of $253 million, or 24 cents per share, the company earned 63 cents per share.

Quarterly revenue slid 14 percent to $5.15 billion from $6 billion last year.

Analysts polled by Thomson Reuters expected earnings of 63 cents per share on higher revenue of $5.44 billion. Analysts typically do not include one-time charges in their estimates.

The restructuring charge was related to "the realignment of the company's work force" and to global real estate consolidation, the company said in a release. In August, Accenture said it would cut some 336 senior-level executive positions, totaling about 7 percent of its senior executives, and reduce office space.

Revenue in the fourth quarter fell across nearly all groups as a result of the global downturn, the company said in a release. In all, consulting revenue totaled $2.91 billion, a decrease of 19 percent from last year. Outsourcing revenue fell 7 percent to $2.23 billion.

For the full year, the company earned $1.59 billion, or $2.44 per share, down from $1.69 billion, or $2.65 per share, a year ago. Revenue slid 8 percent to $21.58 billion from $23.39 billion.

Accenture expects net revenue for the first quarter to range between $5.3 billion and $5.5 billion, but did not provide an earnings per share estimate. Analysts have forecast earnings of 69 cents per share on higher revenue of $5.54 billion.

For fiscal 2010, Accenture forecast profit of $2.64 to $2.72 per share. The midpoint matches analysts' $2.68-per-share average estimate. The company is targeting new bookings for the year in the range of $23 billion to $26 billion.

"We expect the first half of fiscal 2010 to be challenging year on year," Chief Financial Office Pam Craig said on a conference call with analysts. "We are assuming that the global economy and our business will improve in the second half of the fiscal year, even though it is still an uncertain and unpredictable time."

Craig said the company expects fiscal 2010 revenue to range from a 3 percent drop from 2009 levels to a 1 percent increase, as it expects the first half of its fiscal year to trend below 2009 results. That would imply a range of $20.93 billion to $21.8 billion.

Analysts have forecast higher full-year revenue of $21.99 billion, on average.

Shares of Accenture slid 56 cents, or 1.5 percent, to $35.97 in after-hours trading, after falling 74 cents to close the regular session at $36.53.

Accenture Layoff

Accenture said Thursday that it will thin its ranks of senior executives.

The company, which announced the layoffs in a statement, said it will cut its senior executive ranks by 7 percent. Accenture will take a charge of $128 million to cover severance and other layoff costs.

In another cost cutting move, Accenture said that it is cutting its office space to save on real estate. That move will result in a charge of $119 million.

Accenture CEO William Green said the senior executive layoffs will ensure the company “has the right people, skills and capabilities, at the right levels and in the right places.”

The cost cuts are expected to be complete in the fiscal first quarter. Accenture also stuck with its fourth quarter revenue target of $5 billion to $5.2 billion.

Accenture to Lay off 336 senior level managers

Bangalore: Accenture, a business consulting and outsourcing company is likely to lay off around 336 senior-level managers as part of a broad-based restructuring effort. William Green, CEO, Accenture said, "We are taking this step to position Accenture better for both short-term and long-term economic improvement growth and profitability."

The company has about 177,000 employees globally, of which 4,800 are senior-executive employees. The lay off is likely to be completed by the end of November 2009. The company said that the reductions would cost about $247 million in the fourth quarter, which ends on August 31. Out of $247 million, about $128 million of the charge is for severance and related costs of workforce reductions at the senior executive level and $119 million linked to reduction of excess office space. The company said that the space reductions would be completed by the end of August, while the job cuts are expected to be completed in the first quarter of fiscal 2010.

According to a projection by Goldman Sachs Group, global technology spending will decline by eight percent this year. Accenture said that it continued to expect net revenues for the fourth quarter in the range of $5 billion to $5.2 billion with operating margins between 13.4 percent and 13.7 percent. But the company also added that the restructuring charges will likely reduce its earnings per share for both the fourth quarter and the full year by 24 cents.

The company had generated net revenue of $23.39 billion for the fiscal ended August 31, 2008. In the last one year, the stock of Accenture has climbed by 11 percent on the New York Stock Exchange (NYSE).

Accenture to lay off senior executive workforce by 7%

Updated on Friday, August 21, 2009, 11:12 IST

Chicago: Global management consulting and outsourcing company Accenture is reducing its senior executive workforce by seven percent besides, pruning real estate capacity as part of restructuring efforts.

Restructuring is expected to cost the company USD 247 million in the fourth quarter of fiscal 2009 ending August 31.

Of the costs, about USD 119 million would be related to reduction of excess office space globally and the remaining for severance and related costs of workforce reduction.

The seven percent workforce reduction would mean over 300 senior-executives would be laid-off.

"As part of our drive to deliver high performance... we are acting boldly to position Accenture better for both short-term and long-term economic improvement growth and profitability," Accenture Chairman and CEO William Green said in a statement today.

The New-York based company expects space reductions to be completed by end of the current fiscal and the workforce actions to be completed during the first quarter of fiscal year 2010.

Prior to the cut, the company had 4,800 senior-executive employees and a total of 177,000 employees globally.

Green said the company is taking steps to ensure that it has the right cost structure to support the business going forward.

Reduction of excess office space globally would increase the productivity of the company’s fixed cost-base and generate ongoing savings, while the workforce reduction has been designed to ensure that the company’s global workforce is properly aligned to "best serve the evolving needs of its clients and its business".

"The realignment of our senior-executive workforce will help ensure that Accenture has the right people, skills and capabilities, at the right levels and in the right places," the statement said.

Accenture expects net revenues for the fourth quarter of fiscal 2009 to be in the range of USD 5 billion-USD 5.2 billion, it added.