Accenture plc (ACN) recently won a 7-year information technology (IT) application servicing deal from the United Kingdom Department for Work and Pensions (DWP). The deal value could be €50 million to €70 million per year, depending on Departmental demand for IT services. Per the terms of the deal, Accenture will offer its technology and services to develop, maintain and support a variety of the DWP’s customer-oriented operations.
Accenture’s services will help DWP save costs to a large extent, deliver key programs, such as Universal Credit, and provide services that suit citizens the most. Universal Credit is the U.K. government’s program to simplify working-age benefits into a single streamlined system.
In another recent development, the outsourcing and consulting giant announced that it will develop and implement a new benefits eligibility system for the State of Kansas. The system, known as Kansas Eligibility and Enforcement System (KEES) will provide the state with an ability to make various human service programs more comprehensive, thereby aiding citizens with a better online service experience. Financial terms of the 5-year contract were not disclosed.
We have seen Accenture winning deals from various industrial sectors, geographical locations and governments, thanks to its rich industry experience. The steady demand for it is cloud computing, virtualization, systems integration, enterprise resource planning and other application services has helped the company generate four straight quarters of double-digit sales and earnings growth.
Accenture’s fourth quarter results were mediocre, with the bottom line modestly beating the Zacks Consensus Estimate. Based on the improving business momentum and market share gains, Accenture provided an upbeat revenue and earnings guidance for fiscal 2012. Moreover, we are encouraged by the company’s steady flow of new business and believe that the trend will continue.
However, increasing competition from International Business Machines Corp. (IBM), a strained spending environment and Accenture’s broad European exposure may temper growth prospects to some extent.
Currently, Accenture has a short-term Hold recommendation, denoted by the Zacks #3 Rank.
ACCENTURE PLC (ACN): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment