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PricewaterhouseCoopers merger pays off

With a merger under its belt and management consulting services business soaring, PricewaterhouseCoopers drove revenue up nearly 20 percent in 1998.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
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Kim Girard
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With a merger under its belt and management consulting services business soaring, PricewaterhouseCoopers drove revenue up nearly 20 percent in 1998.

The company today posted revenue of more than $15.3 billion for the fiscal year-ended June 30, a 19.9 percent increase over their combined 1997 revenue. Price Waterhouse and Coopers & Lybrand merged last July to become PricewaterhouseCoopers, which is one of the world's largest professional services firms.

The company, which is privately held, did not disclose its net income for the fiscal year.

Overall, 1998 has also been a strong year for PricewaterCoopers's Big Five rivals, including Ernst & Young (19.8 percent revenue increase), Deloitte & Touche (30 percent increase), and KPMG (15 percent increase).

"None of that [increase] is anything to sneeze at," said Rick Telberg, editor of Accounting Today, a New York-based industry magazine that follows business at the top consulting firms. "It's all great growth," driven by Year 2000 projects, ERP installations, and corporate globalization initiatives, he said.

But PricewaterhouseCooper's 20 percent growth in the wake of a gargantuan global merger is phenomenal, he said.

"Normally we'll see layoffs, a winnowing of [service] redundancies, clients with questions, and a slowdown with the pickup of business," he said. "None of that happened. PricewaterhouseCoopers was remarkably able to sidestep the confusion of the merger."

Despite industry-wide slowdowns in some Asian markets, PricewaterhouseCoopers' business has grown in all regions and for all services, the company's CEO, James Schiro, said in a prepared statement.

The firm reported revenue increases in all its service lines, posting a 41.5 percent jump in worldwide management consulting services--from $2.8 billion in 1997 to $3.9 billion in 1998.

The firm also posted strong growth in business process outsourcing for 1998 with a 159 percent increase from $15.7 million to $40.7 million; global human resource solutions with a 32.1 percent increase from $299 million to $395 million; financial services with an 18.2 percent increase; and tax and legal services which grew by 18.2 percent.

The company's revenue in North America grew 24 percent from $5.2 billion to $6.46 billion, followed by revenue in South America, which rose 32 percent to $608 million. Revenue posted in Asia/Australia and Europe and Europe/the Middle East/Africa increased 15 percent and 16 percent respectively.