Accenture, the US outsourcing, technology and consulting giant will report a strong dollar-impacted set of third quarter results when it reports on June 23.
Analysts expect it to report earnings per share of $1.41, up from $1.24 in the third quarter of 2015. They also expect it to report revenues of $8.3 billion, up from $7.8 billion in the third quarter of 2015 in line with the company’s predictions during its second-quarter results that they would be in the range of $8.1 billion-$8.33 billion.
Accenture has been keen to note that the strong dollar has impacted its finances, predicting that it will negatively hit growth of 2.5%.
The company’s strong start to 2016 meant that the group raised its full-year revenues and EPS outlook.
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Digital investment
In 2015 Accenture invested fairly heavily in digital technologies. In June and July 2015, it bought Hong Kong-based digital agency PacificLink Group and retail strategy and digital services provider Javelin Group, while in 2016 it purchased US digital solutions provider Agilex for an undisclosed sum as well as Israeli cybersecurity company Maglan also for an undisclosed sum.
“Accenture’s recent success is being propelled by a series of moves that the company has made to improve its product offerings,” said analysts at Zacks glowingly. “The company has added products in the analytics application space and invested heavily in digital and marketing capabilities.”
On the other side, it sold transportation IT company Navitaire to IT group Amadeus for $830 million, and then 60% of its insurance software business to private equity company Apax Partners.
UBS analyst Michael Briest estimated in a note to investors that although the cost to Accenture’s revenues might be around $200 million, it will be “largely compensated by a new outsourcing deal with Amadeus”.
Although the UK is voting about its future in the EU the day that Accenture’s results come out, it will be interesting to see what the company says about its future should the ‘leave’ vote win. Olly Benzecry, managing director for UK and Ireland at Accenture, was part of a pro-‘remain’ joint letter with other tech bosses.
Share value
Accenture’s progress has certainly been well-received by the market, with the share price moving up 15% over the course of the year and 23% over the last 12 months.
It’s been helped a slow-but-steady increase in dividend although the yieldhas fallen as Accenture’s share price has risen far quicker.
Date: June 22, 2016