(Reuters) - Accenture Plc’s third-quarter revenue and profit came in above Wall Street estimates on Thursday as the consulting and outsourcing services provider benefited from its plan to boost investments in digital and cloud services.
Shares of the company, which also raised its full year adjusted profit forecast, were up about 5 percent at $162.87 in early trading.
Revenue from its digital, cloud and security-related services, which the company terms as “the New”, made up about 60 percent of total revenue for the first time.
Accenture Chief Executive Officer Pierre Nanterme said that “the New” has now become the core of company’s business.
“I would say all our New babies have the potential to grow successfully for many years,” Nanterme said on a conference call.
The Dublin, Ireland-based company has spent more than $3 billion over the last three years on some 70 acquisitions to boost its digital and cloud services in order to compete better with Cognizant and IBM. It has made investments of over $450 million in acquisitions this year.
Accenture’s third-quarter beat was “driven by very strong broad-based revenue growth and healthy operating margin”, Cowen & Co analyst Bryan Bergin said.
Evercore ISI analyst David Togut pointed to continued market share gains in North America and Europe, where revenue grew 11 percent and 22 percent respectively. Evercore raised its PT on Accenture by $2 to $186 after the results.
The company raised its forecast for full year adjusted earnings per share to between $6.66 and $6.71, from between $6.61 to $6.70.
Accenture forecast current-quarter revenue between $9.8 billion and $10.05 billion, the midpoint of which was slightly below average analyst estimate of $10.01 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to the company rose to $1.04 billion in the quarter ended May 31 from $669.5 million a year earlier. It reported earnings of $1.60 per share, compared with $1.05 a year earlier.
Excluding items, the company earned $1.79 per share, above analysts’ estimates of $1.72 per share.
The company’s revenue rose 15.8 percent to $10.84 billion, beating estimates of $10.04 billion. Revenue before reimbursements, or net revenue, was up 16.3 percent to $10.31 billion.
Reporting by Munsif Vengattil in Bengaluru; Editing by Shailesh Kuber