Accenture Sees Growing Demand for Cloud Services, Security

Consulting and outsourcing services provider Accenture reported a smaller quarterly profit on Thursday, hurt in part by higher costs.

Shares of the company were down 2.7% at $123.11 before the bell.

Operating costs rose 4.3% to $7.62 billion in the second quarter ended Feb. 28.

Accenture has been investing heavily in fast-growing businesses such as digital and cloud services, amid stiff competition from Cognizant Technology Solutions and IBM .

The company forecast current-quarter revenue between $8.65 billion and $8.90 billion. Analysts on average were expecting revenue of $8.80 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to Accenture fell to $838.8 million or $1.33 per share in the second quarter, from $1.33 billion or $2.08 per share, a year earlier.

Profit in the year-ago quarter was benefited by a $553.6 million gain on the sale of some businesses.

Accenture’s net revenue rose 4.7% to $8.32 billion, helped by strong demand for its digital, cloud and security-related services, which make up more than 40% of revenue.

Analysts on average had expected second-quarter profit of $1.30 per share and revenue of $8.34 billion.

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