What To Expect From Accenture’s Second Quarter Earnings

by Trefis Team
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Accenture (NYSE:ACN) is scheduled to announce its fiscal Q2 results on March 22. The company remains a leader in the consulting and outsourcing domains and has reported solid growth in revenues despite intense and growing competition in both industries. This trend is likely to continue through the February ended quarter as well. As a result, the company expects its revenues to grow by 6-8% through fiscal 2018.

We have a $149 price estimate for Accenture’s stock, which is slightly lower than the current market price.

Solid Q2 Guidance

Accenture’s management has given positive guidance for the second fiscal quarter, with combined consulting and outsourcing revenues expected to increase 7-8% on a year-on-year basis to $9.3 billion. The key driver of the revenue growth in recent years has been strong double-digit growth in bookings for digital-related strategy and consulting services. Accenture has been able to strategically position itself in these domains through acquisitions over the past few years. These acquisitions have not only diversified the company’s geographical footprint but also augmented its portfolio of services in the Cloud, Internet of Things and cyber security domains. In addition to revenue growth, Accenture’s operating profit margin could be slightly higher on a y-o-y basis in the quarter.

Operating Margin To Improve Driven By Sales Mix

Improvement in operating profit, complemented by slightly lower taxes, should drive the company’s bottom line. As a result, Accenture’s non-GAAP net income and earnings per share are likely to be around 10% higher over the comparable prior year period at around $990 million and $1.50, respectively.

We have summarized our Q2 FY’18 expectations for Accenture, based on the company’s guidance and our own estimates, on our interactive dashboard platform. If you think differently, you can change expected segment revenue, operating margin and net income margin for Accenture to gauge how changes will impact its expected EPS.

See our complete analysis for Accenture

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