Accenture Revenue Up In Down MarketAccenture Revenue Up In Down Market

Accenture is using its outsourcing service offerings to fortify earnings in a market marred last year by steep drops in spending on consulting and systems integration services. The management consulting and IT service provider, which in July launched a $1.67 billion partial initial public offering, earned $81.7 million on $2.99 billion in revenue for the firm's first 2002 fiscal quarter, ended Nov. 30, 2001.

This was the highest quarterly revenue in the firm's history, up 6% from the first quarter of fiscal 2001. Outsourcing revenue, which accounts for about $1.98 billion, or 18%, of Accenture's business, was up 32% from the same period a year ago.

Accenture weathered drops in revenue from clients in the communication, high-tech, and financial-services industries by getting more work from the government, as well as clients in industrial-material and energy industries. Accenture's Government global market unit earned $337 million, a 58% increase over the first quarter of fiscal 2001. Industrial and energy global market units reported net revenue of $650 million and $541 million, respectively, increases of 22% and 17%.

Accenture stimulated outsourcing services growth by opening offshore facilities in India and the Czech Republic in November. The firm continues to win many contracts in the application management space due to its expanded offshore capabilities, in particular a contract signed earlier this week to design and build an enterprise resource planning application for DuPont, says Lehman Brothers analyst Karl Keirstead.

Dirk Godsey, a senior J.P. Morgan H&Q analyst, says Accenture's worldwide presence helped the firm greatly, particularly in the area of financial services. Even though Accenture's revenue from financial-services clients was down 6% from the first fiscal quarter of 2001, it could have been worse if not for Accenture's coverage of the global market. Says Godsey, services firms like KPMG Consulting, DiamondCluster, and Sapient rely more on the U.S. financial-services business, and haven't faired as well as Accenture.