Shares of Accenture (ACN) are on the rise on Thursday after the company reported better than expected quarterly results, showing it bounced back to pre-pandemic growth levels. The IT consulting company also raised its full-year revenue forecast as more businesses shift operations to the cloud. Following the news, Bank of America analyst Jason Kupferberg upgraded Accenture to Buy, saying he was "quite impressed" with second-quarter bookings that included consulting and outsourcing both hitting "record levels".

RESULTS: 

Accenture reported second-quarter adjusted earnings per share of $2.03 and revenue of $12.1B, both above consensus of $1.90 and $11.83B, respectively. The company also reported "record" new bookings of $16B, a 13% increase from the second quarter last year, with "record bookings in both consulting and outsourcing at $8B each." Accenture said it sees third-quarter revenue between $12.55B-$12.95B, with consensus $12.18B.

Additionally, the company raised its fiscal year 2021 adjusted earnings per share view to $8.32-$8.50 from $8.02-$8.25, with consensus at $8.23. Accenture also raised its fiscal year 2021 revenue growth view to 6.5% to 8.5% in local currency from 4% to 6%, and fiscal year 2021 free cash flow view to $7B-$7.5B from $6B-$6.5B. The company now expects operating cash flow to be in the range of $7.65B-$8.15B, compared with $6.65B-$7.15B previously and sees cash returned to shareholders of at least $5.8B, compared with at least $5.3B previously.

Julie Sweet, Accenture’s CEO, said, “With our outstanding second-quarter financial results, we have returned to overall pre-pandemic growth ahead of expectations while continuing to take market share faster than before the pandemic. We have seen another quarter of strong, broad-based demand for our services across geographic markets and industries, and delivered record new bookings as well as excellent profitability and free cash flow. Our performance reflects the power of our laser focus on creating client value and being a trusted partner, incredibly talented people and unwavering commitment to inclusion and diversity, strong ecosystem partnerships, and the substantial investments we have made year in and year out since we set out to be the leader in digital, cloud and security and continuous innovation. We are proud to be helping our clients not only recover and rebuild but also reimagine their futures.”

Accenture also raised its quarterly dividend 10% to 88c per share. The dividend, which is payable on May 14, represents a 10% increase over the quarterly dividend rate of 80c per share in fiscal 2020. Meanwhile, the company announced a one-time bonus, equal to one week of base pay, for all people below managing director level.

BUY ACCENTURE: Bank of America analyst Jason Kupferberg upgraded Accenture to Buy from Neutral with a price target of $300, up from $261, as he was "quite impressed" with second-quarter bookings of $16B that included consulting and outsourcing both hitting "record levels." The analyst also noted that "positive leading indicator" billable headcount growth of 4.6% was the company's highest in five and a half years. In addition to second quarter beats on operating income, earnings per share, and revenue, Accenture made a "sizeable" the fiscal year 2021 increase to its guidance that was more than anticipated, Kupferberg said. The analyst also cited a faster than expected demand recovery and Accenture's underlying business momentum for his upgrade.

PRICE ACTION: In late morning trading, shares of Accenture have gained about 1.5% to $268.12.