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Accenture (ACN) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

Accenture plc ACN is scheduled to report second-quarter fiscal 2020 results on Mar 19, before market open.

While the top line is likely to have benefited from strength across all segments, the bottom line is expected to have gained from higher revenues and operating results.

Over the past year, shares of Accenture have declined 8.3% compared with 3.6% loss of the industry it belongs to and 5.2% decline of the Zacks S&P 500 composite.

 

Let’s check out the expectations in detail.

Strength Across Segments to Boost Revenues

Strength across all the segments — Communications, Media & Technology, Financial Services, Health & Public Service, Products and Resources — is likely to have driven Accenture’s second-quarter fiscal 2020 revenues. The Zacks Consensus Estimate for revenues is pegged at $11.10 billion, indicating growth of 6.2% year over year. Notably, the consensus estimate lies within the company guided range of $10.85-$11.15 billion. In first-quarter fiscal 2020, net revenues of $11.36 billion increased 7% year over year.

Going by segments, the consensus estimate for Communications, Media & Technology revenues stands at $2.28 billion, indicating year-over-year growth of 6.4%. The segment is likely to have benefited from strength in Software & Platforms across all geographic regions and Communications & Media in Europe.

The consensus mark for Financial Services revenues is pegged at $2.12 billion, indicating a year-over-year increase of 3.4%. The segment is expected to have benefited from strength in Insurance across all geographic regions and banking & capital markets in Growth Markets and North America, which is likely to have partially offset the decline in banking & capital Markets in Europe.

The consensus estimate for Health & Public Service revenues stands at $1.85 billion, indicating year-over-year growth of 8.1%. The uptick is likely to have come from growth in Public Service and Health in North America.

The consensus estimate for Products revenues is pegged at $3.14 billion, indicating a year-over-year increase of 8%. Segmental revenues are expected to have been driven by strength in Consumer Goods, Retail & Travel Services and Life Sciences across all geographic regions, led by North America.

The consensus mark for Resources revenues stands at $1.69 billion, indicating year-over-year growth of 3.1%. The segment is expected to have been aided by growth in Energy and Utilities across all geographic regions and Chemicals & Natural Resources in Europe and Growth Markets.

Earnings Expectations

Higher revenues and operating results, and higher non-operating income and lower share count are likely to have partially offset higher effective tax rate. This is expected to get reflected in Accenture’s second-quarter fiscal 2020 earnings, the Zacks Consensus Estimate for which is pegged at $1.73 per share, flat year over year.

In first-quarter fiscal 2020, earnings of $2.09 per share came ahead of the year-ago figure by 6.6%.

What Our Model Says

Our proven Zacks model does not predict an earnings beat for Accenture this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Accenture has an Earnings ESP of -0.29% and a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Accenture PLC Price and EPS Surprise

 

Accenture PLC Price and EPS Surprise

Accenture PLC price-eps-surprise | Accenture PLC Quote

Stocks to Consider

Here are a few stocks that investors may consider as our model shows that these have the right combination of elements to beat on earnings in their upcoming release:

FactSet Research Systems Inc. FDS has an Earnings ESP of +0.77% and a Zacks Rank #2. The company will report results on Mar 26.

Commercial Metals Company CMC has an Earnings ESP of +4.98% and a Zacks Rank #2. The company will report results on Mar 19.

Winnebago Industries, Inc. WGO has an Earnings ESP of +5.41% and a Zacks Rank #3. The company will report results on Mar 25.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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