Accenture today blamed the slow economy and loss-making investments for profits of just $10.6m (£7.4m) for the first three months of 2002, down sharply from profits of $80.9m (£56.3m) for the same period in 2001.
However, stripping out the effects of this investment charge, the firm’s profits were up slightly, while revenues remained more or less steady at $2.9bn.
Accenture has had to take the $212m charge because it plans to sell most of its venture and investment portfolio to reduce volatility in future earnings.
The firm did not elaborate on the exact nature of the loss-making investments, but added that it was cautiously optimistic about its core consulting business.
Its results were consistent with the company’s announcement in March when it said it would exceed analysts’ expectations for its operating results. Revenues before reimbursements were $2.9bn, an increase of 1% in US dollars. Net income before minority interest, excluding investment writedowns, increased 9% to $236m.
‘Our resilience in what continues to be a difficult global economic environment enabled us to achieve modest revenue growth and improved operating margins in the second quarter,’ said Accenture chairman and CEO, Joe Forehand.