Accenture's Profits TumbleAccenture's Profits Tumble

Amid weakening demand for IT services, Accenture Ltd. Thursday said revenue for the fourth quarter, ended Aug. 31, fell 3%, to $2.7 billion, compared with a year ago. For the year--Accenture's first since formally breaking from Arthur Andersen--revenue rose 1%, to $11.6 billion, compared with fiscal 2001.

Net income for the quarter was $38.1 million, or 8 cents a share, compared with $42.7 million, or 10 cents, a year ago. Accenture's net income on the year was $244.9 million, or 57 cents per share, compared with $376.9 million, or 91 cents, in 2001.

"We're in for a continued bumpy ride," Accenture CEO Joe Forehand said during a conference call. Forehand predicted that spending on consulting and systems integration would remain flat for the rest of the calendar year and possibly through next. "Businesses don't have the confidence to initiate new projects," he said.

According to research released this week by Gartner, worldwide spending on IT services will grow just 2.8 % this year, to $557.5 billion. Next year, Gartner expects growth of 7.1%. Says Gartner analyst Eric Rocco, "The worst is here now."