Accenture jumps 5% in the stock market on a stronger than expected Q3 earnings report

Accenture jumps 5% in the stock market on a stronger than expected Q3 earnings report
  • Accenture jumps 5% in the stock market on a stronger than expected Q3 earnings report.
  • The multinational professional services company had £5.16 billion in cash as of 31st May.
  • The consulting firm slashed full-year revenue guidance due to the Coronavirus pandemic.

Accenture (NYSE: ACN) released its third-quarter financial results on Thursday that topped analysts’ estimates for earnings and revenue. The company, however, slashed its full-year revenue guidance due to the Coronavirus pandemic that it said was weighing on demand. Accenture recently announced plans of hiring 1,400 new workers in St. Louis County.

Shares of the company opened more than 5% up on Thursday. At £174.70 per share, Accenture is currently about 3% up year to date in the stock market after recovering from a low of £115.76 per share in March. Learn more about how do people make money on the stock market.

Accenture’s Q3 financial results versus analysts’ estimates

According to Refinitiv, analysts had forecast the company to print £8.76 billion in revenue in the quarter that ended on 31st May. In terms of earnings per share (EPS), their estimate was capped at £1.49. In its report on Thursday, Accenture topped both estimates posting a higher £8.86 billion in revenue in the third quarter and £1.53 of earnings per share.

On a year over year basis, the consulting firm saw a 1% decline in revenue (U.S. dollars) and a little under 2% decline in earnings per share.

The Dublin-headquartered company reported £1.38 billion of operating income in Q3 with a 10 basis points increase in operating margin to 15.6%. Accenture valued its new bookings, consulting bookings, and outsourcing bookings at £8.86 billion, £4.99 billion, and £3.87 billion respectively.

Accenture boasts £5.16 billion in cash

As of 31st May, the Irish company boasted £5.16 billion in cash that represents an £810 million increase as compared to the end of Q2. Accenture also declared 64 pence per share of quarterly cash dividend on Thursday that marks a 10% increase versus its dividend in the same quarter last year.

For fiscal 2020, the professional services company now estimates 3.5% to 4.5% growth in its revenue in local currency. Accenture anticipates its full-year EPS to fall in the range of £6.10 to £6.20. In its previous guidance, it had forecast a 3% to 6% growth in annual revenue and EPS of £6.03 to £6.20.

The Fortune Global 500 company also raised its forecast for free cash flow in fiscal 2020 to £4.67 billion to £5.08 billion from its earlier outlook of £4.43 billion to £4.83 billion.

At the time of writing, the Dublin-based multinational professional services company has a market cap of £115.63 billion and a price to earnings ratio of 28.17.

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.
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