Accenture Limited
This company beat Wall Street estimates for the second quarter by 12.28% on the back of record consulting bookings.
Accenture Limited (ACN) is a management consulting, technology services and outsourcing company that services businesses and government. The company has consultants in 49 countries.
On Mar 27, Accenture reported second-quarter 2008 earnings and beat Wall Street estimates by 12.28%, or 7 cents a share. Earnings per share were 64 cents per share, an increase of 36% over the second-quarter 2007. The company said the increase was driven by higher operating income and a lower tax rate in the quarter. Net revenues increased 18% to $5.61 billion compared to the year-ago period.
ACN's performance was strong with new bookings at $6.44 billion and record quarterly consulting bookings of $3.79 billion. Accenture also grew operating income by 14% compared to last year.
The company is bullish going into the third quarter and about the rest of fiscal-year 2008.
'Our strong performance in the second quarter reflects the momentum we have seen in the marketplace and the essential nature of our services, as clients rely on the value we deliver in helping them achieve high performance in a challenging economic environment. With strong bookings, including our highest consulting bookings ever, we are seeing solid demand for our services,' said William D. Green, Accenture's chairman & CEO.
Accenture Raises 2008 Earnings Guidance
ACN raised earnings guidance for the full year to a range of $2.55 to $2.60 from the previous range of $2.36 to $2.41 provided in Dec 2007 during the first-quarter earnings announcement.
Accenture also continues to grow through acquisitions. On Apr 3, the company announced it agreed to acquire Sopia Corp., a Tokyo-based consultancy that specializes in Oracle systems integration. Sopia's customer base is heavy in manufacturing, distribution and logistics. Financial terms of the deal were not disclosed.
In response to the earnings report, brokerage analysts raised estimates for the third quarter and the year. Ten out of 11 covering analysts raised consensus estimates for the third quarter in the last 30 days by six cents to 69 cents from 63 cents per share.
With the company raising guidance for the year, analysts also raised full year estimates to match the guidance. All eleven covering analysts raised in the last 30 days to $2.59 from $2.39 per share. The latest consensus is on the high end of the company's forecasted range of $2.55 to $2.60.
Accenture, a Zacks #1 Rank (Strong Buy), has a forward P/E of 13.97. It has surprised on estimates the last three quarters on average of 7.86%.
Immucor Acquisition Dilutive
Immucor, Inc. (BLUD) reported Q3 EPS that beat our estimate by $0.04 on revenue that also exceeded our forecast. Management expects revenue, gross margin, and EPS to be at the high end or modestly higher from the guidance that was previously announced on May 31, 2007. The pending acquisition of BioArray Solutions is expected to be significantly dilutive over the next several years. We lowered our FY09 EPS estimate accordingly.
The strong earnings growth has been driven by double-digit sales growth, gross margin expansion, and operating cost control. Although under pressure from the Echo launch, gross margins are expected to regain momentum next fiscal year.
Our price target is based on roughly 33x FY09 EPS estimate. At its current price of $27.45 per share, BLUD is trading at roughly 28x our fiscal 2009 earnings estimate of $0.97 per share, which is at a discount to the group multiple of roughly 31x. Although continuing to grow, revenue may fall below expectations due to lower than anticipated sales from the customer loyalty program and Europe. Our target price moves to $32.
Aside from the pressures of the Echo launch, gross margins are expected to regain momentum from the eventual growth in reagent sales, manufacturing efficiencies, and price increases.
