What 2 Things Can Accenture Depend On This Quarter?

Photo Credit: Luis Villa del Campo

Accenture PLC (ACN) Information Technology – IT Services | Reports March 24, Before Market Opens

Accenture (ACN), one of the largest management consulting firms, is scheduled to report FQ2 earnings tomorrow, before the opening bell. The company is coming off a mixed first quarter where it missed the Estimize consensus by 4 cents but beat top line estimates by $7 million.That said, Accenture has beat expectations in 4 of the last 6 quarters and consistently outperforms Estimize in 54% of reported quarters.

Tomorrow, the Estimize community is looking for EPS of $1.19, 1 cent above Wall Street, and revenue expectations of $7.72 billion, roughly in line with the Street. Compared to the same period last year, this projects a 10% increase in profitability while revenue is expected to grow 3%. Revisions activity has been relatively flat in the past 3 months, indicating a small liklihood Accenture will make a splash tomorrow. 

Recently, Accenture has been making acquisitions, left and right. With an already robust presence, the consulting firm has targeted European based firms dealing in innovation, marketing and cloud computing to expand its services and client reach. Most notably, Accenture acquired Tquila UK to enhance Salesforce consulting and cloud implementation services. Accenture has also focused on acquiring analytics companies. Last quarter, digital, cloud, and cyber accounting for 40% of total revenue, roughly 20% more than the year prior.

Meanwhile, Accenture is in excellent financial health. As of December, the company had only $26 million in debt while holding over $3 billion in cash and cash equivalents. This kind of flexibility allows Accenture to continue its pursuit of acquisitions and large common stock buybacks. On the downside, frequent changes create integration risks and can impact in-house growth.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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