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Accenture Beats Fiscal Q3 2018 Estimates, Raises Outlook

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EPS beat estimates

Accenture (ACN) reported its fiscal Q3 2018 financial results today. Its non-GAAP EPS, after adjustments, came in at $1.79 per share, easily outpacing the Wall Street Journal‘s estimate of $1.72 per share. Moreover, EPS increased 17.8% YoY (year-over-year).

From the graph above, we can see the EPS growth in the last five quarters. The bottom line has grown at a CAGR of 4.2%. In the last four quarters, the company had significantly beaten analysts’ estimates.

Revenue analysis

In fiscal Q3 2018, Accenture’s top line improved 16.3% YoY to nearly $10.3 billion. In local currency terms, it increased 11%.

Accenture’s top line was driven by strong bookings growth. Overall net bookings in the reported quarter came in at $11.7 billion, up 19.8% YoY. All the operating segments maintained double-digit growth. Both Consulting and Outsourcing revenue grew 18% and 14%, respectively. However, in local currency terms, they gained 12% and 10%, respectively. Moreover, the strong product portfolio isn’t only supporting top-line growth for the company but also safeguarding its position against large tech firms like the IBM (IBM), Oracle (ORCL), and Microsoft (MSFT).

Outlook

Accenture believes EPS in fiscal 2018 will be in the range of $6.66 to $6.71. The company projects revenue in fiscal Q4 2018 between $9.80 billion and $10.05 billion, reflecting 7% to 10% improvement in local currency. Likewise, the company expects revenue for fiscal 2018 as a whole to expand in the range of 9.5% to 10% in local currency terms.

Accenture expects its operating margin for fiscal 2018 at 14.8% and its free cash flow in the range of $4.9 billion to $5.2 billion.

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