Accenture expects consulting business to pick up

Thu Dec 19, 2013 12:15pm EST
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(Reuters) - Accenture Plc said it expected its consulting business to turn the corner this financial year as orders rise, building on strength in its outsourcing unit that helped the company report better-than-expected quarterly results.

Accenture shares rose as much as 5 percent on Thursday.

"We think consulting could be flat to low single-digit positive (in the second quarter) ... we see the potential for building momentum in consulting as we go through the year," Chief Financial Officer David Rowland said on a conference call.

Consulting bookings rose to $4.3 billion in the first quarter from $4.2 billion a year earlier.

Accenture's consulting business has been hit in the past few quarters as companies cut down on discretionary spending. Revenue from the business has declined in five of the last six quarters.

The company did report a rise in revenue from the business in the fourth quarter but said it was too early to say if that was sustainable.

Revenue from the consulting business fell 1 percent to $3.94 billion in the quarter ended November 30.

Rival IBM said in October that revenue from its services business, which consists of consulting and application management, was flat in the third quarter.

Accenture's outsourcing business has benefited, particularly in Europe, as companies cut costs amid patchy economic recovery.   Continued...

Visitors look at devices at Accenture stand at the Mobile World Congress in Barcelona, February 26, 2013. REUTERS/Albert Gea