Accenture Plc. (ACN) is set to report fourth-quarter fiscal 2014 results on Sep 24. Last quarter, the company posted a positive earnings surprise of 4.13%. Let us see how things are shaping up for this announcement.
Growth Factors this Past Quarter
Accenture delivered better-than-expected third-quarter results. Revenues also increased on a year-over-year basis, reflecting an increased focus on the Outsourcing business, new bookings and continuous return of shareholders value. Another encouraging factor was the revenue increase in its Consulting business.
Additionally, Accenture’s deal wins across different sectors, especially insurance, during the quarter reflects strong demand for its services. Strategic alliances are also expected to boost Accenture’s growth prospects.
We believe that Accenture’s solid performance across insurance, banking and healthcare segments reflects strong demand for its services, boosting long-term growth prospects. However, increasing competition from Cognizant Technology Solutions (CTSH) and International Business Machines, a strained spending environment and Accenture’s broad European exposure may temper its growth prospects to some extent.
Earnings Whispers?
Our proven model does not conclusively show that Accenture will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a $1.09. Hence, the difference is 0.00%.
Zacks Rank: Accenture carries a Zacks Rank #4 (Sell). We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other 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 (MU) Earnings ESP of +3.70% and a Zacks Rank #3 (Hold)
Neogen Corp. (NEOG) has an Earnings ESP of +4.35% and hasa Zacks Rank #3
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