Accenture’s outlook below expectations

accenture-surfing-elephantConsulting and outsourcing services outfit Accenture slightly raised its full-year profit forecast, but the revised outlook was still below market expectations.

Accenture has invested heavily in its digital and cloud services, amid stiff competition from Cognizant and Biggish Blue.

Revenue in its consulting unit, which has a higher profit margin than its outsourcing business, increased 2.6 percent in the second quarter its slowest growth in more than a year.

Chief Financial Officer David Rowland told the press that he plans to write $1.5 billion cheques for acquisitions in the year ending August.

Accenture said it expects adjusted profit of $5.70 to $5.87 per share for its year ending August, slightly higher than its prior forecast of $5.64 to $5.87 per share.

However, the company narrowed its full-year revenue forecast growth range to 6 percent to 8 percent in local currency, from its earlier 5-8 percent range.

The new forecast points to revenue of between $34.86 billion to $35.51 billion.

Analysts on average are expecting a profit of $5.87 per share and revenue of $34.60 billion.

Accenture said second-quarter net revenue rose 4.7 percent to $8.32 billion, as it benefited from strong demand for its digital, cloud and security-related services, which made up more than 45 percent of revenue.

Net income attributable to Accenture fell to $838.8 million in the quarter, from $1.33 billion last year.

Profit in the year-ago quarter received help from a $553.6 million gain on the sale of some businesses.

The company’s profit in the second quarter was hurt in part by a higher tax rate and increased operating costs, up 4.3 percent to $7.62 billion.

Analysts on average had expected revenue of $8.34 billion.