Accenture's Q3 2018 Results: A Company That Is Firing On All Cylinders

Jul. 05, 2018 10:09 AM ETAccenture plc (ACN)7 Comments
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WG Investment Research


  • Accenture reported Q3 2018 results that beat the top- and bottom-line estimates.
  • The company is firing on all cylinders, and investors should expect for more of the same in the quarters ahead.
  • ACN shares are still a long-term buy even at today's price.

Accenture (NYSE:ACN) is one of the few companies in the R.I.P. portfolio that continues to perform well in today's environment and, as a result, the market has rewarded shareholders with a rising stock price. Since I first wrote about Accenture in early 2017, ACN shares have outperformed the broader market by a wide margin.

ChartACN data by YCharts

I still believe today that Accenture is worthy of your investment dollars, even with the stock sitting at [or close to] all-time highs because this company is well-positioned for the changing digital economy. It also helps the bull case that management continues to produce impressive operating results quarter after quarter.

What Have You Done For Me Lately?

On June 28, 2018, Accenture reported better-than-expected Q3 2018 financial results. The company reported Q3 2018 adjusted EPS of $1.79 (beat by $0.07) on total net revenue of $10.31B (beat by $270M). For comparison purposes, the Q3 2018 net revenue and adjusted EPS increased by 11% and 18%, respectively when compared to the same period of the prior year.

Additionally, as shown, the company reported strong results across the board. 3 out of 5 Operating Groups had double-digit net revenue growth - the other 2 had high single-digit growth - and the company experienced strong demand in all three of the geographic regions that it operates in.

During the conference call, management highlighted Consulting (up 12% YoY to $5.69B) and Outsourcing (up 10% YoY to $4.63B) as two areas that had a real impact on Accenture's net revenue growth for Q3 2018. However, the company's digital, cloud, and security services businesses (i.e., "The New") continues to be the key growth driver for Accenture.

The New now accounts for ~60% of Accenture's net revenue (up from 50% in Q3 2017) and, as described during the company's

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This article was written by

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Our President and CIO is a CPA with experience in public accounting and the financial services industry. He earned his Master of Accountancy degree in 2008 and his B.S. in Business Management in 2007. He is also a Level III CFA candidate. He has been intrigued by the market from the start. Over the years, he has learned that long-term investing is a discipline that, if followed, will help contribute to building lasting wealth. As such, most of our articles will be about the investments that we plan to hold for at least 3 to 5 years, as long as the company's story does not change. As a Seeking Alpha contributor, our main goal is to write about the companies that are key to our portfolio with the hope of promoting discussion (for or against the investment) from others within the SA community.Please visit our website for more information about W.G. Investment Research LLC.

Disclosure: I am/we are long ACN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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