UPDATE 2-Accenture says too early to call consulting growth sustainable

Thu Sep 26, 2013 6:30pm EDT

Related Topics

* Sees first-qtr revenue $7 bln-$7.3 bln vs est $7.39 bln

* Fourth-qtr earnings/share $1.01, in line with estimates

* Fourth-qtr revenue $7.09 bln vs est $6.9 bln

* Shares fall 4 pct after market (Adds details from conference call, analyst comment; updates share movement)

By Sruthi Ramakrishnan

Sept 26 (Reuters) - Accenture Plc said it was too early to say if the fourth-quarter growth in its consulting business was sustainable, and forecast quarterly revenue below analysts' estimates.

Shares of the outsourcing and consulting services provider fell 4 percent in extended trading.

Revenue in Accenture's bigger business, consulting, grew 2 percent to $3.8 billion in the three months ended August. It had declined in the prior four quarters.

"One quarter doesn't make a trend," Chief Financial Officer David Rowland said on a conference call on Thursday.

Demand for consulting services has not recovered enough for sustained growth, he said.

Deals in the $10-$50 million range converted to revenue faster than expected in the quarter, Rowland said.

Accenture said it expects first-quarter revenue of $7 billion-$7.3 billion. The forecast assumes a 2 percent hit related to currency fluctuations.

Analysts on average were expecting revenue of $7.39 billion, according to Thomson Reuters I/B/E/S.

Accenture said some programs in its financial services and health and public services businesses will end in the quarter ending November, hurting growth.

"Just based on their bookings and guidance, I would not anticipate strong consulting growth over the next few quarters, especially when it sounds like Q1 could be a challenge," Edward Jones analyst Josh Olson said.

Smaller rival Cognizant Technology Solutions Corp last month raised its full-year forecast, saying clients in North America were investing more in IT services and software encouraged by a steady economic recovery.

Accenture's fourth-quarter revenue rose 4 percent to $7.09 billion. Net income rose to $727.3 million, or $1.01 per share, from $636.2 million, or 88 cents per share, a year earlier.

Analysts had expected the company, whose clients include London's Heathrow Airport, Nokia Oyj, Baker Hughes Inc and AstraZeneca UK, to earn $1.01 per share on revenue of $6.9 billion.

Accenture said it authorized a $5 billion share buyback program, taking its outstanding repurchase authority to about $7 billion.

The company's shares closed at $75.87 on the New York Stock Exchange on Thursday. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das)

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