Hot Stock to watch: Accenture Plc (NYSE: ACN)

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Accenture Plc (NYSE: ACN) stock rose over 6.88% on 17th December, 2020 (Source: Google finance) after the company raised its full-year sales forecast and posted better than expected quarterly estimates as an extended work-from-home period boosted its digital, cloud and security services. The company posted strong new bookings of $12.9 billion, which represents a 25% increase over Q1 last year, including 16 clients with over $100 million in bookings. The company continued to invest substantially in the business, including closing 10 acquisitions this quarter in strategic areas, such as cloud, intelligent operations and Industry X. The company generated free cash flow of $1.5 billion and returned $1.3 billion to shareholders through repurchases and dividends. ACN also invested approximately $500 million in acquisitions and the company expects to invest at least $1.7 billion in acquisitions this fiscal year.

ACN in the first quarter of FY 21 has reported the adjusted earnings per share of $2.17, beating the analysts’ estimates for the adjusted earnings per share of $2.04, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 4 percent to $11.76 billion in the first quarter of FY 21, beating the analysts’ estimates for revenue by 3.39%. Approximately 50% of the revenues came from seven industries that were less affected by the pandemic, and in aggregate continue to grow high single digits, with continued double digit growth in public service, software platforms and life sciences. The company delivered operating margin of 16.1% for the quarter, which represents an increase of 50 basis points.

Moreover, Consulting revenues for the first quarter were $6.3 billion, which is a decline of 1% in U.S. dollars and a decline of 2% in local currency, including a reduction of approximately 3% from a decline in revenues from reimbursable travel costs. Outsourcing revenues were $5.4 billion, which is up 9% in U.S. dollars and 8% in local currency. Further, in Europe, revenue fell 1% in local currency. The company saw mid-single digit growth in Italy, with UK improving to flat. In growth markets, the company delivered 3% revenue growth in local currency, led by high single digit growth in both Japan and Australia.

The company forecast fiscal year 2021 revenue growth between 4% and 6%, above its previous estimate of growth between 2% and 5%.

Accenture expects second-quarter revenue to be between $11.55 billion and $11.95 billion, above Wall Street estimates of $11.35 billion.

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