Tuesday, March 22, 2011

Accenture Plc (NYSE: ACN): Q2 Earnings Preview 2011

Accenture Plc

Accenture Plc (NYSE: ACN), the second-largest technology-consulting company, is scheduled to release fiscal second quarter earnings after the closing bell on Thursday, March 24, 2011. Analysts, on average, expect the company to report earnings of $0.71 per share on revenue of $5.72 billion. In the year ago quarter, the company reported earnings of $0.60 per share on revenue of $5.18 billion.

Accenture plc operates as a management consulting, technology services, and outsourcing company. Its business is organized in five operating groups and their 19 industry groups.

In the preceding fiscal first-quarter, the Dublin, Ireland-based company's net income was $534.71 million, or $0.81 per share, compared with a profit of $444.82 million, or $0.67 per share, in the year-ago quarter. Total revenues for the quarter increased to $6.48 billion from $5.75 billion last year. Analysts, on average, expected the company to report earnings of $0.75 per share on revenue of $5.75 billion.

For the second quarter of fiscal 2011, Accenture expects net revenue in the range of $5.6 billion to $5.8 billion. This figure was arrived at after taking into consideration a 2% negative foreign-exchange impact.

The company has benefited from a rebound in technology spending. At its last earnings call in December, the company boosted its outlook for the full year 2011. Earnings are expected in the range of $3.08 to $3.16 per share, compared to the prior range of $3.00 to $3.08 per share. Net revenue growth outlook was raised to a range of 8% to 11% in local currency from its previous range of 7% to 10% in local currency. New bookings are expected to range between $25.0 billion and $28.0 billion. The company also expects operating margin of between 13.6% and 13.7%, annual tax rate of 28.0% to 29.0%. Accenture also forecast operating cash flow in the range of $2.7–$2.9 billion; property and equipment additions of roughly $340 million; and free cash flow in the range of $2.4 billion to $2.6 billion. "Momentum is building, and is continuing," Chief Executive William Green told analysts on a conference call. Green also noted that corporate clients were boosting spending, and business from public sector clients was not falling.

In January, the company completed the acquisition of Germany-based customer relationship management (CRM) and mobility software provider CAS Computer AG. Following the acquisition, Accenture will be able to capitalize on CAS Computer’s intellectual property and its global customer base.

The company's stock currently trades at a forward P/E (fye August 31, 2012) of 14.26 and PEG Ratio (5 yr expected) of 1.35. In terms of stock performance, Accenture shares are up nearly 16% over the past year.

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