Accenture Earnings Preview: Revenues Set To Grow As Order Signings Improve

Accenture (NYSE:ACN) is set to report its fiscal Q4 2017 earnings on Thursday, September 28. In the previous quarter, the company reported 5% y-o-y growth in revenues to $8.87 billion. In Q3, the company reported record new signings as its book-to-bill ratio, which indicates the dollar amount of new orders received for every dollar amount of revenue billed, stabilized at 1.1x. During this earnings announcement, we expect:

• Consulting revenues to outpace the growth in the industry. We also expect that the Consulting business will deliver mid to low-single-digit growth in Q4 2017, as significant investments in new and high-growth areas such as digital, cloud and security services continue to gain traction. However, we expect the company’s consulting book-to-bill ratio to stabilize at 1.1x as it signs more consulting contracts.
• Outsourcing revenues are also expected to outpace the broader outsourcing industry, as bookings for this vertical have been strong in recent quarters. We expect the company to report mid-single digit growth in revenues for Q4.

See our full analysis for Accenture

Company’s Guidance For FY17 and FYQ4

Accenture expects its net revenue to be in the range of $8.85 billion to $9 billion in fiscal Q4, a growth of 5-8% in constant currency. For fiscal 2017, the company has revised its guidance downwards due to a negative impact on revenues from the strengthening dollar. The company stated in its press release that it recorded a $510 million non-cash settlement charge in May related to the termination of its pension plan in the U.S. This settlement charge will reduce the company’s fiscal 2017 diluted GAAP EPS by approximately $0.47 and its full-year GAAP. Based on this update, it expects diluted EPS to be in the range of $5.37 to $5.44 for the year.

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