Shares of Accenture plc (ACN) hit a new 52-week high of $91.36 on Dec 19 and eventually closed at $90.51. This was the second consecutive trading day on which the company achieved a new high following the better-than-expected first-quarter fiscal 2015 results reported on Dec 18.
Since the earnings release, the stock price has moved up 6.1%. This world’s leading management consultancy, technology and outsourcing services provider amassed a return of approximately 16.8% over the past one year and a year-to-date return of 14.4%. The average trading volume for the last three months aggregated nearly 3,134K shares.
The company posted earnings of $1.29 per share for the first quarter which increased 12.2% from the year-ago quarter figure of $1.15 and handily surpassed the Zacks Consensus Estimate of $1.19. The year-over-year increase was attributed to higher revenues, higher non-operating income and lower share count.
Accenture’s first-quarter net revenue increased 7.3% year over year to $7.89 billion and beat the Zacks Consensus Estimate of $7.69 billion. Net revenue also beat management’s guided range of $7.55 to $7.80 billion, primarily aided by an 11% increase in Outsourcing revenues and a 4% increase in Consulting revenues.
Buoyed by better-than-expected first-quarter results, Accenture raised its revenue guidance for fiscal 2015. The company now expects net revenue to grow in the range of 5% to 8% in local currency compared with previously guided range of 4% to 7%. Furthermore, for the second quarter of fiscal 2015, Accenture expects net revenue between $7.25 billion and $7.50 billion.
Accenture continues to reward shareholders with consistent dividends and share repurchases. The company repurchased 8.4 million shares for $670 million during the first quarter. During the reported quarter, Accenture paid a total cash dividend of $679 million. The company increased semi-annual cash dividend by 10% during the quarter.
Nevertheless, we remain slightly cautious about the stock due to increasing competition from Cognizant Technology Solutions Corp. (CTSH) and FTI Consulting, Inc. (FCN) and a sluggish economic recovery which may impact growth.
Currently, Accenture carries a Zacks Rank #4 (Sell). A better-ranked stock worth considering in the Consulting industry is CoreLogic, Inc. (CLGX) sporting a Zacks Rank #1 (Strong Buy).
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