Accenture plc ACN is set to report first-quarter fiscal 2016 results on Dec 17. Last quarter, the company posted a positive earnings surprise of 3.60%. Moreover, it should be noted that Accenture has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 5.09%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Accenture’s strategy of growing through product innovation and acquisitions is encouraging. Also, increased focus on the Outsourcing business, new bookings and consistent return of shareholders value are the other positives.
Accenture’s solid performance across insurance, banking and health care segments reflects strong demand for its services, which should aid first-quarter earnings.
However, we remain slightly cautious due to the intensifying competition and an uncertain IT spending environment, which may undermine the company’s performance in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Accenture will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: ESP for Accenture is 0.00%. This is because the Most Accurate estimate stands at earnings per share of $1.31, in line with the Zacks Consensus Estimate.
Zacks Rank: Accenture’s Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies, which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Micron Technology Inc. MU, with an Earnings ESP of +16.67% and a Zacks Rank #3.
Carnival Corporation CCL, with an Earnings ESP of +17.07% and a Zacks Rank #3.
FactSet Research Systems Inc. FDS, with an Earnings ESP of +0.69% and a Zacks Rank #3.
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