Accenture delivered dismal second-quarter results, wherein both the
top and bottom lines missed the Zacks Consensus Estimate. However,
revenues increased on a year-over year basis due to continued
growth in the Outsourcing business, which led to bookings growth.
Guidance was also encouraging. Nonetheless, its consulting business
remains a disappointment. Improved bookings growth and solid
performance across insurance, banking and healthcare segments
reflects strong demand for Accenture's services, boosting long-term
growth prospects. However, increasing competition from its peers, a
strained spending environment and Accenture's broad European
exposure may temper its growth prospects to some extent. Thus, we
initiate our coverage on Accenture with a Neutral recommendation.
Based in Dublin, Ireland, Accenture plc (ACN) is one of the
world's leading management consulting and technology services
organizations. With about 275,000 employees globally, the company
delivers a wide range of consulting, technology and outsourcing
services to its clients in industries such as communications, high
tech, financial services, public service, products and
Accenture has extensive relationships with the world's leading
companies and governments and operates in over 200 cities in 56
countries. It seeks to deliver value to its clients by leveraging
its industry knowledge, global delivery capability and
The company reports under five segments, namely, Communications,
Media & Technology, Financial Services, Health & Public
Service, Products and Resources. The company derives its revenues
by providing Outsourcing and Consulting services.
Geographically, revenues are generated in the Americas, EMEA
(including Europe, Middle East and Africa) and the Asia
Most of the competition comes from International Business
Machines Corp., Genpact Limited, Cognizant Technology Solutions
Corp. and Infosys Ltd.
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