Accenture Reports Q3 Beat, RBC Capital Reduces Estimates

Accenture (NYSE:ACN) shares surged over 4% in pre-market on Thursday following the company's release of better-than-expected fourth-quarter results and an optimistic outlook for fiscal 2025.

The consulting and outsourcing giant reported adjusted earnings per share of $2.79 for the quarter, slightly exceeding analyst expectations of $2.78. Revenue grew 3% year-over-year to $16.4 billion, surpassing the Street estimate of $16.35 billion.

Accenture's new bookings for the quarter totaled $20.1 billion, marking a 21% year-over-year increase, with $1 billion coming from generative AI projects. For fiscal 2024, the company achieved a record $81.2 billion in new bookings, reflecting a 13% annual increase.

Julie Sweet, Accenture’s chair and CEO, highlighted the company’s resilience and ability to adapt, emphasizing the success of their scalable and evolving business model.

Looking ahead, Accenture forecasts revenue growth of 3% to 6% in local currency for fiscal 2025 and anticipates full-year earnings per share between $12.55 and $12.91, representing 5% to 8% growth from 2024.

In addition, the company announced a 15% hike in its quarterly dividend to $1.48 per share and approved an extra $4 billion for its share repurchase program.

Accenture (NYSE:ACN) is gearing up to release its quarterly earnings report on Thursday, September 26, 2024, before the market opens. This announcement is highly anticipated by investors and analysts alike, as it provides a snapshot of the company's financial health and operational performance. Accenture, a global professional services company, offers a broad range of services and solutions in strategy, consulting, digital, technology, and operations. It operates in a competitive landscape, going head-to-head with other consulting giants such as Deloitte, PwC, and McKinsey & Company. The earnings per share (EPS) estimate set by Wall Street analysts for this quarter is $2.77, with projected revenue of approximately $16.38 billion.

The EPS estimate of $2.77 represents a year-over-year increase of 2.2%, indicating a positive growth trajectory for Accenture. This growth is further underscored by the expected revenue of $16.33 billion for the quarter, marking a 2.2% rise from the same quarter in the previous year. Such financial metrics are crucial for investors as they reflect the company's ability to grow its earnings and expand its operations amidst the competitive and ever-evolving global market.

Over the past 30 days, the consensus EPS estimate has been revised upwards by 0.6%, a testament to the analysts' growing confidence in Accenture's performance. This positive reassessment is likely influenced by the company's strategic initiatives and its ability to adapt to market demands, including the application of Generative AI (GenAI) for large-scale transformations. These technological advancements not only enhance Accenture's service offerings but also position it as a leader in innovation within the consulting industry.

Accenture's history of exceeding the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 2.9%, further bolsters expectations for a strong performance in the upcoming earnings report. Such a track record of earnings surprises plays a significant role in shaping investor expectations and can lead to positive stock price movements if the trend continues.

Given the company's solid financial indicators and the optimistic projections by analysts, there is a high probability that Accenture will beat earnings expectations for the fourth quarter. This potential outcome is supported by Accenture's strategic use of technology, its consistent growth in bookings, and its ability to deliver innovative solutions to its clients. As the earnings report date approaches, investors and market watchers will be keenly observing how Accenture's financial performance aligns with these expectations.

UBS analysts upgraded Accenture (NYSE:ACN) to Buy from Neutral, setting a new price target of $400 on the stock.

The analysts highlighted the potential for multiple expansion as the market begins to anticipate accelerated revenue growth driven by AI opportunities. While there are concerns about the pace of IT spending, the analysts believe Accenture's shift towards cloud services, digital transformation, cybersecurity, and now Generative AI will support higher and more sustainable growth.

The analysts’ evaluation of Accenture's top 10 alliance partners indicates a positive trend for revenue acceleration over the next year. They noted that the current stock price does not fully reflect the potential of Generative AI, with Accenture already securing approximately $2 billion in GenAI bookings by Q3/24, compared to $300 million in the fiscal year ending August 2023.

Additionally, the analysts expect GenAI adoption to accelerate as clients recognize the value from initial experimentation, potentially scaling even faster than Accenture's cloud business, which grew from $1 billion in revenue in 2012 to $32 billion, representing about 50% of total revenue in 2023.

Accenture (NYSE:ACN) is gearing up for its quarterly earnings report on Thursday, June 20, 2024, before the market opens. With Wall Street setting its sights on an earnings per share (EPS) of 3.14 and revenue estimates hovering around $16.57 billion, the spotlight is on Accenture's financial performance. As a leading global professional services company, Accenture offers a broad range of services and solutions in strategy, consulting, digital, technology, and operations. It operates in a competitive landscape, going head-to-head with other consulting giants and technology service providers. The upcoming earnings report is crucial as it provides insights into the company's operational efficiency and market position.

Despite Accenture's impressive track record of surpassing earnings expectations in the past four quarters, with an average beat of 4.9%, the current forecast suggests a tempered outlook. Analysts predict a slight year-over-year decline in both revenues and earnings for the third quarter of fiscal 2024. The anticipated revenue is pegged at $16.5 billion, a marginal decrease from the previous year, attributed to reduced spending in key sectors such as software and platforms, communications, media, and banking. This scenario underscores the challenges Accenture faces amidst shifting market dynamics and client spending behaviors.

However, not all is bleak for Accenture. The Managed Services segment is expected to shine, with revenues projected to hit $8.2 billion, marking a 4.6% increase from the previous year. This growth is partly fueled by the effective deployment of Accenture's SynOps platform, highlighting the company's ability to innovate and adapt to changing market needs. Such performance in the Managed Services segment could offset the downturns in other areas, underscoring the importance of diversification in Accenture's business model.

The financial community closely watches earnings revisions, as they can significantly impact a stock's short-term movements. In Accenture's case, analysts have revised their consensus EPS estimate downward by 0.6% over the last 30 days. This adjustment reflects a cautious stance on the company's financial outlook for the quarter ended May 2024. Historical trends suggest that the direction of earnings estimate revisions can influence stock performance leading up to the earnings announcement, making it a critical factor for investors to monitor.

Accenture's valuation metrics, such as the price-to-earnings (P/E) ratio of approximately 25.54 and the price-to-sales (P/S) ratio of about 2.78, offer insights into how investors view the company's earnings potential and overall value. These ratios, along with the enterprise value to sales (EV/Sales) and the enterprise value to operating cash flow (EV/OCF), provide a comprehensive picture of Accenture's financial health and market position. With a low debt-to-equity (D/E) ratio and a solid current ratio, Accenture demonstrates financial stability and resilience, key attributes that investors consider when assessing the company's long-term growth prospects.

Accenture (NYSE:ACN) experienced a 6% drop in its stock price intra-day today after the company adjusted its revenue growth expectations for the fiscal year 2024 downward. In its Q2, Accenture reported an earnings per share of $2.77, which was higher than the anticipated $2.66 by analysts. However, its revenue of $15.8 billion was just shy of the $15.84 billion forecast.

For the upcoming Q3, Accenture projects its revenues to range between $16.25 billion and $16.85 billion.

For the fiscal year 2024, Accenture has revised its expected revenue growth to between 1% and 3% in local currency, down from the earlier projection of 2% to 5%.

Accenture (NYSE:ACN) shares dropped more than 5% intra-day today after the company released its Q4 results and provided guidance for its full fiscal year.

The company reported an EPS of $2.71, surpassing the Street estimate of $2.66. However, the revenue for the quarter came in slightly below expectations at $15.99 billion, compared to the Street estimate of $16.07 billion.

Looking forward, Accenture offered guidance for 2024, projecting an EPS range of $11.97 to $12.32. This is slightly lower than the Street forecast of $12.46. Additionally, for fiscal year 2024, Accenture anticipates revenue growth in the range of 2% to 5%.

For the first quarter of fiscal 2024, the company expects revenues to fall within the range of $15.85 billion to $16.45 billion.

Accenture (NYSE:ACN) reported its Q3 earnings results yesterday, with EPS of $3.19 coming in better than the Street estimate of $3.01. Revenue was $16.6 billion, beating the Street estimate of $16.49 billion.

Management noted continued pressure on revenue and bookings from smaller deals, especially in Strategy & Consulting, systems integration work and Communications, Media & Technology. New bookings increased 2% year-over-year on a reported basis, and increased 4% in local currency to $22.1B in Q3 for a book-to-bill ratio of 1x.

For Q4/23, the company expects revenue to be in the range of $15.75-$16.35 billion, compared to the Street estimate of $16.35 billion. For the full year, the company sees EPS in the range of $11.52-$11.63, compared to the Street estimate of $11.60.