Sustained demand for digital and cloud products pushed up Accenture’s (CAN) revenues in the fourth quarter. As a result, earnings increased exceeded analysts’ forecast. The company provided guidance for fiscal 2019 and raised its semi-annual dividend by 10%. The stock which has outperformed the market so far this year dropped after the announcement, paring the earlier gains.
Net profit advanced to $1.03 billion or $1.58 per share from $0.93 billion or $1.48 per share in the fourth quarter of 2017. Earnings were higher by two cents compared to analysts’ forecast. During the three-month period, operating margin grew by 10 basis points to 14.3%, and new bookings came in at $10.8 billion.
The company issued a bullish outlook for fiscal 2019 and raised its semi-annual dividend by 10%
Revenues of the professional services provider jumped 11% to $10.1 billion, broadly in line with Wall Street estimates. Consulting revenues gained 12% while Outsourcing revenues rose 9%. North America, the company’s primary market, registered a 10% revenue growth. Revenues from Europe and growth markets rose 10% and 12% respectively.
“Our growth strategy and innovation-led approach are clearly resonating with our clients. With our durable business model and disciplined management, we are very well-positioned to continue gaining market share and delivering value for our clients and shareholders,” said CEO Pierre Nanterme.
Buoyed by the strong results, the company issued some upbeat guidance, expecting revenues to grow by 7-10% in the first quarter to the range of $10.35 billion to $10.65 billion. Revenue is forecast to grow by 5-8% in the whole of 2019 when earnings are seen rising to the $6.98-$7.25 per share range.
The management declared a semi-annual cash dividend of $1.46 per share, which represents a 10% increase from the previous dividend.
Accenture is adapting quickly to the changing market dynamics, with increased focus on emerging areas such as cloud computing and multilevel security solutions. Meanwhile, strategic acquisitions – a continuing process for the company for several years now – helped it broaden customer base across all markets.
Accenture’s shares gained 13% since January this year, before hitting a record high last week. The stock closed the previous trading session slightly higher but pared the gains in premarket trading after the earnings report Thursday.