Is a Beat in the Cards for Accenture (ACN) in Q2 Earnings?
Accenture Plc ACN is set to report second-quarter fiscal 2018 results on Mar 22. Notably, the company boasts a strong earnings record, having surpassed the Zacks Consensus Estimate in all the trailing four quarters with an average positive surprise of 3%.
Therefore, the question lingering on investors’ minds is whether this company will be able to continue with its upbeat performance this quarter as well.
What the Zacks Model Unveils
Our proven model shows that Accenture is likely to beat estimates this quarter. This is because the stock fulfils the Zacks criteria of a positive Earnings ESP and a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. 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 +0.03% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the to-be-reported quarter is pegged at $1.49 per share, representing year-over-year growth of 12%. Additionally, analysts polled by Zacks project revenues of roughly $9.3 billion, up 11.8% from the year-ago quarter.
Accenture’s result for the fiscal second quarter is likely to benefit from the expansion of its clientele base and acquisitions. The stock has rallied 29.3% in the past year, outperforming the 25.3% increase of the industry it belongs to.
Let’s now discuss the influencing factors in detail.
Acquisitions Enrich Portfolio and Expand Reach
Acquisitions have remained one of the key growth strategies for Accenture. The management consultancy, technology and outsourcing services provider closed 37 buyout deals worth approximately $1.7 billion in fiscal 2017. Also, over the last three fiscals, Accenture invested approximately $3.4 billion in purchasing nearly 70 companies including start-ups.
So far in fiscal 2018, the company has completed several acquisitions including Mackevision, Rothco and Altima. We believe these transactions to positively impact the company’s top-line performance in the period to be reported.
Accenture PLC Price and EPS Surprise
Accenture PLC Price and EPS Surprise | Accenture PLC Quote
New Client Additions and Partnerships
Notably, Accenture signed agreements with clients from a variety of industries during the quarter. The new names include a pharmaceutical company, Shionogi, a communications service provider, M1, plus an energy company called Statoil and Bouygues Construction among others.
The company also entered into a number of partnerships, expected to drive its revenues. Its partnership with Maana is aimed at speeding up the digital transformation of the companies related to the oil and gas industry.
The company’s collaboration with Roche is anticipated to enrich the digital healthcare experience of cancer patients. It also teamed up with Faurecia for the advancement of autonomous vehicles related innovations. Additionally, the collaboration of United Way of Metropolitan Dallas with Accenture, Salesforce CRM and Configero for cloud transformation is another tailwind.
The new partnerships along with the existing ones like Oracle ORCL, Apple AAPL and Microsoft might solidify the company’s position across multiple industries. With a focus on increasing its operational efficiency, Accenture is expected to maintain its impressive performance momentum.
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