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Accenture (ACN) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research

Accenture plc ACN is scheduled to report third-quarter fiscal 2019 results on Jun 27, before market open.

While the top line is likely to benefit from strength across the majority of segments, the bottom line is expected to benefit from higher revenues and operating results.

So far this year, shares of Accenture have gained 32% compared with 26.2% rise of the industry it belongs and 16.4% rise of the Zacks S&P 500 composite.


Let’s check out the expectations in detail.

Strength Across Segments to Boost Revenues

Strength across the majority of its segments — Communications, Media & Technology, Financial Services, Products and Resources is likely to drive Accenture’s revenues. The Zacks Consensus Estimate for third-quarter fiscal 2019 revenues is pegged at $11.01 billion, indicating growth of 6.8% year over year. Notably, the consensus estimate lies within the company guided range of $10.80-$11.10 billion. In second-quarter fiscal 2019, net revenues of $10.45 billion increased 5% year over year.

Going by segments, the consensus estimate for Communications, Media & Technology revenues is pegged at $2.31 billion, indicating year-over-year growth of 8.3%. The segment should benefit from strength in Software & Platforms across all geographic regions, led by North America. In second-quarter fiscal 2019, segment revenues of $2.15 billion increased 8% year over year.

The consensus mark for Financial Services revenues is pegged at $2.20 billion, indicating year-over-year growth of 2.7%. The segment should benefit from strength in Insurance across all geographic regions and banking & capital markets in Growth Markets, which is likely to be partially offset by a decline in banking & capital Markets in Europe. In second-quarter fiscal 2019, segment revenues of $2.05 billion decreased 2% year over year.

The consensus estimate for Products revenues is pegged at $3.08 billion, indicating year-over-year growth of 8.4%. Segmental revenues are expected to be driven by strength across all industry groups and geographic regions, led by Consumer Goods, Retail & Travel Services and Industrial in Europe and Growth Markets. In second-quarter fiscal 2019, segment revenues of $2.91 billion increased 6% year over year.

The consensus mark for Resources revenues stands at $1.76 billion, indicating year-over-year growth of 19.9%. Strength across all industry groups and geographies should boost the segment. In second-quarter fiscal 2019, segment revenues of $1.64 billion increased 17% year over year.

The consensus estimate for Health & Public Service revenues is pegged at $1.65 billion, indicating year-over-year decline of 3.1%. The expected decline is likely to be partially offset by growth in Public Service in Europe and Growth Markets. In second-quarter fiscal 2019, segment revenues of $1.71 billion increased 1% year over year.

Earnings Likely to Improve Year Over Year

The company’s bottom line is expected to benefit from higher revenues and operating results, lower non-operating expense and lower share count, which are, likely to be partially offset by a higher effective tax rate. The Zacks Consensus Estimate for earnings per share in the to-be-reported quarter is pegged at $1.88, indicating year-over-year growth of 5%.

In second-quarter fiscal 2019, adjusted earnings of $1.73 per share came ahead of the year-ago figure by 15 cents.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks, Zacks Rank #4 (Sell) or 5 (Strong Sell) are best avoided, especially if they have a negative Earnings ESP. 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 0.00% and a Zacks Rank #3, a combination that makes surprise prediction difficult.

Accenture PLC Price and EPS Surprise

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat estimates.

Booz Allen Hamilton BAH has an Earnings ESP of +0.66% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FLEETCOR Technologies FLT has an Earnings ESP of +0.31% and a Zacks Rank #2.

S&P Global SPGI has an Earnings ESP of +0.53% and a Zacks Rank #3.

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Click to get this free report S&P Global Inc. (SPGI) : Free Stock Analysis Report FleetCor Technologies, Inc. (FLT) : Free Stock Analysis Report Accenture PLC (ACN) : Free Stock Analysis Report Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research