Accenture beats the market in Q3, raises guidance

Accenture (NYSE: ACN) reported a 4% increase in revenues in the third quarter of 2019 to $11.1 billion, surpassing the Wall Street projection of $11.04 billion.

Q3 earnings rose to $1.93 per share, from $1.60 per share in the year-over period, which included a $0.19 tax charge. The EPS was three cents higher than the street consensus of $1.89 per share.

New bookings for the quarter were $10.6 billion, with consulting bookings of $6.0 billion and outsourcing bookings of $4.6 billion.  

ACN shares were up slightly in green during pre-market hours on Thursday. Accenture shares have gained steadily since December last year when it dropped to a yearly low. The stock has grown about 13% in the past twelve months and hit a record high earlier this month.

Accenture CEO David Rowland said, “With revenue growth of 8.4 percent in local currency, we again gained significant market share. We also delivered strong profitability, generated outstanding free cash flow and returned $1.4 billion in cash to our shareholders.”

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Outlook

Buoyed by the better-than-expected results, the company raised its outlook for the full fiscal year. For this period, the company now expects revenue growth in the range of 8-9% in local currency, compared with 6.5-8.5% previously. The company now expects diluted EPS to be in the range of $7.28 to $7.35, compared with $7.18 to $7.32 previously.

For the fourth quarter, Accenture expects revenues for the fourth quarter in the range of $10.85 billion to $11.15 billion, 5-8% growth in local currency.

Last month, Accenture’s main rival Cognizant Technology (CTSH) reported a 3% drop in first-quarter earnings to $0.91 per share on revenues of 44.1 billion, which is down 5% year-over-year. The results were hurt mainly by slower growth in financial and healthcare services.

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