Seeking Alpha

Accenture slides following FQ4 report, takes IBM lower with it (ACN)

  • The soft revenue and bookings guidance provided with Accenture's (ACN -3.8%) FQ4 results are oveshadowing the company's dividend hike and $5B buyback expansion. Consulting/outsourcing rival IBM (IBM -1.7%) is trading lower in sympathy. Wipro (WIT -3.2%) is also selling off, but outsourcing peers Infosys (INFY -0.3%) and Cognizant (CTSH -0.6%) have pared their morning losses.
  • Accenture's CC remarks (transcript) likely aren't helping. CFO David Rowland mentioned that while outsourcing bookings were healthy (book-to-bill of 1.4), all 3 consulting bookings segments - management consulting, tech consulting, and systems integration - were at the low end of its B2B guidance ranges. Total consulting B2B was 1.0
  • Rowland adds Accenture thinks the "cycle of lower growth" it has seen in recent quarters "won't change much" near-term.
  • Echoing comments from Cisco's John Chambers, CEO Pierre Nanterme mentioned Accenture is seeing more emerging markets "volatility," even as the U.S. performs well and Europe stabilizes.
  • Janney's Joseph Foresi is staying bullish, arguing Accenture is "well positioned given its high end capabilities to gain market share as outsourcing becomes more commoditized."
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