Consulting is Accenture’s elephant in the room

elephantOutsourcing and consulting services provider Accenture is predicting a miserable year as businesses still do not want to consult with it.

The company slashed its full-year outlook and reported a third-quarter revenue below analysts’ estimates.

In a statement the company said that clients were slowing the pace and level of spending on existing contracts.

According to Bloomberg, CFO David Roland told analysts that the company expects outsourcing revenue to be moderate, and consulting revenue to either decline or grow slightly in the current quarter.

Barclays analyst Darrin Peller commented that the Accenture results indicated that there had been moderate improvement in businesses discretionary spend in 2013.  But the consulting segment, particularly in Europe, was still not doing well.

Accenture’s consulting net revenue dropped two percent to $3.9 billion in the three months ending 31 May. Revenue from the business, which Accenture expected to return to growth, fell for the fourth straight quarter.

This meant that consulting bookings were almost $400 million lower than the company expected.

Accenture chief exec Pierre Nanterme said that the consulting side of the business didn’t improve the way he hoped.

He was somewhat cheered that outsourcing net revenue rose four percent to $3.3 billion in the quarter.

Net revenue rose 0.6 percent to $7.2 billion. Net income rose to $874.1 million in the third quarter, from $762.8 million a year earlier.