Software services company Accenture (ACN 137.41, +0.77 +0.56%) trades off opening lows this afternoon in response to the company’s Q4 earnings and revenue beat and strong guidance.
Getting to the results, ACN reported better than expected Q4 earnings of $1.48 on revenues which rose about 7.8% to about $9.15 billion. Gross margins for Q4 were 31.5%, compared with 31.3% a year ago.
New bookings for Q4 were $10.1 billion and reflect a positive 0.5% foreign-exchange impact compared with last year’s new bookings. Consulting new bookings were $5.1 billion, or 50% of total new bookings. Outsourcing new bookings were $5.0 billion, or 50% of total new bookings.
Revenues by segment increased across the board as Communications, Media & Technology saw revenues increase 7% in USD and local currency to $1.82 billion. Other sectors had similar success with Financial Services, Health & Public Service, Products and Resources all posting year-over-year revenues increases in both USD and local currency.
By geographic segment, ACN is seeing the best growth in Growth Markets – where revenues were up 14% to about $1.80 billion in the quarter. Strength persists in both North America and Europe, to boot. As it were, management also cleared up some uncertainty surrounding the weakness they eluded to in certain markets due to healthcare reforms. Specifically, management noted certain customers had expected reforms, and as reforms have yet to come through certain customers may be adopting a wait-and-see approach.
Looking ahead, ACN expects net revenues for Q1 to be in the range of $9.10-9.35 billion, 5-8% growth in local currency, reflecting the company’s assumption of a positive 2% foreign-exchange impact compared with the first quarter of fiscal 2017.
Big picture, ACN sees fiscal 2018 net revenue growth in the range of 5-8% in local currency. The company expects GAAP diluted EPS to be in the range of $6.36-6.60. The company expects operating margin for the full fiscal year to be in the range of 14.9-15.1%, an expansion of 10 to 30 basis points from adjusted operating margin for fiscal 2017. For fiscal 2018, the company expects operating cash flow to be in the range of $5.0-5.3 billion; property and equipment additions to be $600 million; and free cash flow to be in the range of $4.4-4.7 billion. The company expects its annual effective tax rate to be in the range of 23-25%.
In other news, ACN also raised its semi-annual dividend to $1.33 from $1.21 per share as part of its policy to return cash to shareholders.