NHS squeezes Accenture margins

Record sales though

Accenture comfortably outstripped Wall Street expectations for Q2, posting record revenues for the quarter ending 28 February. The computer services firm had revenues of $3.81bn, $100m higher than consensus forecasts, and advancing 15 per cent on last year (Q2 2004: $3.3bn). Analysts attribute the sales jump to a rebound in management consultancy revenues and a weaker dollar.

Net income was $209.8m (Q2 04: $123.1m) but gross margins eased from 33 per cent in Q2 last year to 30 per cent this time around. In a research note quoted by Reuters, Wachovia Capital Markets blamed the decline on Accenture's business with Britain's National Health Service.

"ACN experienced delays in its ability to deploy a number of system components as planned on its two large NHS contracts that were awarded ... in December 2003," the investment bank said.

New bookings for the quarter were $4.88bn, with consulting accounting for $2.81bn and outsourcing accounting for $2.07bn.

Accenture anticipates revenues of $4bn-$4.2bn in Q3. ®

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