Excerpts from analysis of Accenture's 3QFY06 results (June 29, 2006)

Annex Bulletin 2006-27 June 29, 2006

Excerpts from CONFIDENTIAL client edition

IT SERVICES

Updated 6/29/06, 10:30PM PDT, adds CSC...

Analysis of Accenture's Third Quarter Results

From Great to Better

Accenture Continues to Set Revenue, Profit Records

SCOTTSDALE, June 29 - Accenture did it again. Just as we thought things were so great that they could not get much better, they did. The company's third quarter results, released this afternoon after the markets closed, once again exceeded expectations and set new revenue and profit records. No wonder the Accenture shares rose over four points to $29.25 in after hours trading on the heels of a 2.3% increase during the regular stock market session.

[CHART HERE]

Frankly, that's a pretty tepid reaction to a better than stellar quarter. But these days, IT companies must take what they can get from the stingy investors. IT has not been exactly high on Wall Street's radars, as Accenture's declining trend line between early March and mid-June attests (see above). And that's for arguably the "best of breed" company in terms of fundamentals.

[snip]

Business Segment Analysis

Both of Accenture's horizontal segments reported double digit growth in constant currency. Consulting revenues were up 10% to $2.66 billion (up 6% as reported), while outsourcing business grew by 14% to $1.75 billion (up 11% as reported).

[snip]

Outlook

For the full fiscal year 2006, which ends Aug 31, Accenture said it expected the revenues in the upper end of its previous guidance (9% to 12% growth). Since we have been forecasting 11.3% increase to $17.3 billion even before today's results, we are not making any changes for the year end.

[snip]

"That's all she wrote," we're afraid, for those of you who are NOT Annex Research clients, who are now reading the complete Annex Newsflash, along with all charts which back up our story.

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Volume XXII, Annex Newsflash 2006-25
June 6, 2006

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