Software and consulting major
) recently won a contract from oil major Shell. As per the
agreement, Accenture will provide application maintenance services
to Shell to support the company's SAP-based HR and payroll systems
across the globe.
The multi-year outsourcing contract signed by the company
encompasses different functional areas such as employee
administration, self-service, environmental health and payroll.
The maintenance services offered by Accenture include
preventative maintenance, change management, data archiving and
also management documentation. Application support services include
service desk support, incident resolution and user access
management, application operations and monitoring, as well as
This apart, the tech major has recently won another deal worth
$71.0 million from the U.S Department of Homeland Security. Per the
deal, Accenture will be responsible for further enhancing the
capabilities of its immigration and border management functions.
This new deal involves the upgrade of the system adopted by the
United States Visitor and Immigrant Status Indicator Technology
(US-VISIT), which supplies information to other U.S. Department
State, Customs, Immigration and Coast Guard.
Accenture's industry expertise has facilitated a number of deal
wins across various industrial sectors, geographical locations and
governments. The steady demand for its cloud computing,
virtualization, systems integration, enterprise resource planning
and other application services has helped the company generate four
consecutive quarters of double-digit sales and earnings growth.
Some of the industry experts believe thatACN's booking and
consulting segment has performed well over the past few quarters.
Some analysts also believe that management consulting demand will
remain healthy going forward, despite being driven by a shift in
client demand for cost take-out. Moreover, the company is still not
witnessing any abnormal delays,cancellations , or sales cycle
On the other hand, IT spending growth is expected to be 3.7% in
2012, down from 4.6% in 2011. The downside is primarily due to the
uncertain global economy, euro zone sovereign debt crisis and the
hardware supply chain disruption arising from the floods in
Thailand last year. This will likely weigh on the growth prospects
of the company going forward.
Considering all theabovementioned factors, Accenture seems to be
growing modestly. The company also stated that it will continue to
invest in priority industries (such as Communications) and emerging
markets, where it will focus on building its brand value. We
believe that the company's confidence in adopting such a strategy
in the back drop of lingering global concerns is powered by its
five consecutive quarters ofoutperformance .
We are encouraged by the steady flow of new business and believe
that the trend will continue. However, increasing competition from
), a strained spending environment and Accenture's broad European
exposure may temper its growth prospects.
Currently, Accenture has a short-term Hold rating, as denoted by
theZacks #3 Rank.
ACCENTURE PLC (
): Free Stock Analysis Report
To read this article on Zacks.com click here.