NHS squeezes Accenture margins

Record sales though

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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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