Accenture Plc (ACN - Free Report) is set to report fourth-quarter fiscal 2017 results on Sep 28. Last quarter, the company posted a positive earnings surprise of 1.33%. Notably, over the last four quarters, it has outperformed the Zacks Consensus Estimate with an average positive earnings surprise of 2.6%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
We are positive about Accenture’s latest product additions in the analytics application space, given the increasing demand for digital solutions. Moreover, the company’s strategy of growing through acquisitions is encouraging. These acquisitions have enabled Accenture to foray into new markets, diversify and broaden its product portfolio, as well as maintain a leading position. We believe these will have a positive influence on the company’s upcoming quarterly results.
Furthermore, the recent forecast for worldwide IT spending by Gartner gave some optimism about Accenture’s near-term performance. The research firm estimates worldwide IT spending to grow 2.4% to $3.48 trillion, marking a solid recovery after two consecutive years of decline.
The research firm noted two major catalysts which, it believes, will drive IT spending this year. The first catalyst highlighted by Gartner is decline in the U.S. dollar against several foreign currencies. Secondly, the firm foresees an uptick in digital transformation projects in the near term, which will enable organizations to spend more on IT related infrastructure, products, and services. All these encourage us about the company’s fiscal fourth-quarter overall performance.
Nonetheless, Accenture’s February 2017 announcement of creating 15K new jobs by 2020 and investment plan of $1.4 billion for employee training and opening of 10 innovation centers across the U.S. cities may dent its bottom-line results, in our opinion. The company has already started to work on this space, by opening two innovation centers and hiring people over there.
