Global consulting and outsourcing giant Accenture (NYSE:ACN) posted an earnings report on Thursday, covering the fourth quarter of its fiscal year 2020. The report edged out management's guidance for the quarter by a hair, powered by a strong showing from the outsourcing division.

Here's a closer look at Accenture's latest report.

Accenture's fourth-quarter results: The raw numbers

Metric

Q4 2019

Q4 2018

Change

Revenue

$11.1 billion

$10.5 billion

5.7%

Net income attributable to Accenture

$1.13 billion

$1.03 billion

9.7%

GAAP earnings per share (diluted)

$1.74

$1.58

10%

Data source: Accenture. GAAP = generally accepted accounting principles.

What happened with Accenture this quarter?

  • The fourth-quarter results compared favorably to Accenture's guidance for this period, which had called for earnings near $1.70 per share on revenue in the neighborhood of $11 billion.
  • Management also expected "strong" order bookings in the fourth quarter, shying away from firm numbers on that metric. Actual order bookings landed at $12.9 billion, 19% above the year-ago reading, and reportedly more than $1 billion above Accenture's all-time record.
  • Consulting sales rose 5%, to $6.19 billion. Outsourcing revenues clocked total sales of $4.87 billion, a 6% year-over-year increase.
  • Accenture's growth was broad-based, showing flat or growing sales in every geographic region and nearly all of the company's target industries. In local currencies, Accenture posted a perfect slate of moderate growth in every category. That included Europe, where a flat year-over-year comparison in dollars turned into a 5% increase measured in the euro and British pound, and financial services posted a 3% currency-adjusted increase instead of a 1% GAAP decrease.
  • The company also made some changes to its dividend policy. First, Accenture's dividend checks will now come every quarter rather than the current twice-a-year schedule. At the same time, the company raised its payout by 9.6%, which works out to $0.80 per share. This dividend is payable on Nov. 15 to shareholders of record as of Oct. 17.
Two young businesspeople talking over some papers, a laptop, and a cup of coffee.

Consultants consulting. Image source: Getty Images.

What management had to say

On the earnings call, Accenture CEO Julie Sweet wanted to highlight how the company helps its clients achieve better business results.

Let me bring this to life with an example of a solution that we originally developed for the communication industry and are now using to accelerate value in other industries. For comms companies, building out their networks and providing excellent customer service across all channels are the biggest imperatives.

We helped Verizon (NYSE:VZ) use artificial intelligence [AI], coupled with our deep understanding of the industry, to create digital assistant experiences at scale that can now address more than 70% of Verizon's calls. In many cases, a 20 minute call with an agent has been reduced to a three to four minute digital interaction, significantly improving the customer experience. Verizon's agents have enhanced their skills and now have more time to handle the most complex calls, which is also the most interesting work.

The Verizon solution was then used as a template for other companies in similar situations, allowing Accenture to roll out AI-powered call center solutions faster. Every contract is different, but adding a few tweaks and customizations to a proven solution saves both time and money compared to reinventing the wheel for every customer.

Looking ahead

Accenture's management offered the following projections for the coming quarter and fiscal year:

  • First-quarter sales should land near $11.1 billion, representing roughly 7% year-over-year growth as measured in local currency. This target assumes a 2% foreign-exchange headwind.
  • For fiscal year 2020, Accenture sees revenues rising approximately 6.5% in local currencies.
  • Full-year earnings should increase by 6%, landing near $7.30 per share.