Accenture: Still Focusing on Growth

Accenture Ltd. (ACN), a Zacks #1 Rank (Strong Buy) company, posted fiscal second-quarter earnings of 64 cents per share, exceeding the consensus estimate by 12% and surpassing the year-prior result. Net revenues of $5.61 billion jumped ahead of the previous year’s total by 18%. The company upped its earnings guidance for the full fiscal year as did Wall Street.

The great thing about Accenture is that its solid fundamental growth is not its only positive feature. The consulting company also offers income, currently yielding about 1.2%. ACN also boasts an appealing ROE of 73%, which is well above the industry average of 11%.

Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments.

The Zacks #1 Rank (Strong Buy) company recently announced that it signed an agreement to acquire SOPIA Corporation, a privately-held consulting and IT solutions company that is based in Tokyo and specializes in Oracle systems integration. ACN noted that the terms of the deal were not disclosed.

“This acquisition will enable Accenture to expand its systems integration capabilities in Japan,” said Karl-Heinz Floether, Group Chief Executive of Systems Integration, Technology & Delivery at Accenture. “Japanese clients will benefit from Accenture’s business and industry consulting capabilities, industrialized delivery methodologies, and global reach, and SOPIA’s skills across the entire Oracle suite, and supply chain management software packages.”

In late March, Accenture posted fiscal second-quarter earnings of 64 cents per share, exceeding the consensus estimate by 12% and surpassing the year-prior result. Net revenues of $5.61 billion jumped ahead of the previous year’s total by 18%.

William D. Green, Accenture’s chairman & CEO, said, “Our strong performance in the second quarter reflects the momentum we have seen in the marketplace and the essential nature of our services, as clients rely on the value we deliver in helping them achieve high performance in a challenging economic environment. With strong bookings, including our highest consulting bookings ever, we are seeing solid demand for our services.

The company upped its earnings guidance for the full fiscal year by 19 cents to a range of $2.55 to $2.60 per share. Wall Street followed suit. Ten out of 11 covering analysts increased estimates for the year ending August 2008 to $2.56 per share, versus last month’s $2.39. Some analysts are forecasting $2.59. In fact, the most accurate projection is currently pegged at the $2.59 level.

The great thing about Accenture is that its solid fundamental growth is not its only positive feature. The consulting company also offers income, currently yielding about 1.2%. This is a solid dividend yield when compared to many other companies in ACN’s industry, most of which offer no dividend.

Accenture also boasts an appealing return on equity (ROE) of 73%, which is well above the industry average of 11%.