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Global: Accenture Feeling Public Sector Squeeze
Source: publictechnology.net
Source Date: Friday, October 01, 2010
Created: Oct 05, 2010

Accenture is feeling the pain of the budget restraint in the public sector, reporting an 8% decline in health and public service revenues in its fourth quarter.

CFO Pamela Craig said this was “driven by decline in consulting revenues in public services, as uncertainty and challenges in the public sector remain, particularly in the US, the UK, and other parts of Europe. Outsourcing revenue grew in Q4 and was primarily driven by demand within house and US federal. We expect the revenues in public service will bottom out during fiscal ’11 as we reposition that business."
 
Outside the public sector, the firm has seen an uptick in fortunes. The firm posted net income of $445.5 million for the fourth quarter compared with earnings of $254.7 million a year earlier. Revenue rose 5% to $5.42 billion before reimbursements. Consulting revenue was up 6% and outsourcing revenue rose 4% year-over-year.
 
“[2010] was a challenging year with strong and shifting headwinds,” said CEO Bill Green. “We navigated through it exceptionally well, and we executed with confidence and with discipline. Delivering these results with the challenges we faced in the market, you have to ask yourself, what can we do when the wind is at our backs. And if you combine that with the fact that we are better positioned than ever in our history, I think we will be taking Accenture to the next level. And it won’t be because it just happens. It will be because we make it happen.”
 
Green said the anti-outsourcing/offshoring political rhetoric stirred up by the Obama administration was not deterring US clients to date. “Everyone has been to this movie before,” he argued. “I was with 82 CEOs of US companies two weeks ago. These people are just solvent for being competitive. And frankly, they are going to do what they need to do to compete on the global stage. Outsourcing broadly and leveraging offshore capabilities is a business practice that's here to stay and I think everybody is pretty much focused on it.
 
“So I know there is a lot of noise around [anti-outsourcing], but frankly, I think what businesses are more concerned about is trade policies. They are concerned about regulatory things that challenge their ability to compete as a company on the global stage.”
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