Shares of Accenture Plc ACN soared 5.2% to $175.12 on Thursday after the beat on earnings for the second quarter of fiscal 2019 and the improvement of the outlook for the entire fiscal year.
The Irish global professional services company beat consensus estimates on GAAP earnings per share by 16 cents, posting $1.73, which reflected 26.3% growth year-over-year. Revenue was $10.45 billion, a 5.4% increase, topping expectations by $150 million.
Second quarter revenue was shared among the following segments: Communications, Media and Technology sales went up 8% to $2.15 billion, Financial Services sales declined 2% to $2.05 billion, Health and Public Service sales increased 1% to $10.71 billion, Products sales jumped 6% to $2.91 billion and Resources grew 17% to $1.64 billion.
Geographically, North America accounted for 45.5% of total revenue, Europe 34.8% and Emerging Markets 19.8%.
By service type, consulting increased 6% to 5.79 billion and outsourcing rose 5% to $4.67 billion. The company's new bookings were $11.8 billion, with consulting bookings at $6.7 billion and outsourcing bookings at $5.1 billion.
In addition, amid the most important figures for the quarter, Accenture noted a 0.3 percentage-points jump in the gross margin to 29.2% and a 0.2 percentage points increase in the operating margin to 13.3%.
Accenture improved its full fiscal 2019 outlook for revenue, which is now expected to grow at 6.5-8.5% from the previous growth range of 6-8%. It also updated its earnings outlook, expecting it to fall between $7.18 and $7.32 from the previous range of $7.01 to $7.25. The operating margin is also expected to fall between 14.5-14.7%, and the operating cash flow to range between $5.85 billion and $6.25 billion.
Further, on May 15, Accenture will pay a $1.46 cash semi-annual dividend to its shareholders of record April 11. The ex-dividend date is scheduled for April 10. The distribution, which grew 10% from a year ago, leads to a forward annual dividend yield of 1.67% versus the industry median of 1.79% and the S&P 500 index’s 1.91% as of Thursday.
The share price of the stock has gained 14% over the past year through March 28 and is now abundantly above the 200-, 100- and 50-day simple moving average lines. The share price at close Thursday is also 13% off the midpoint of the 52-week range of $132.63 to $177.49. The market capitalization is approximately $111.86 billion.
The 14-day Relative Strength Indicator of 62.55 suggests that the stock has not yet reached oversold or overbought levels.
Wall Street issued an overweight recommendation rating, meaning the stock is expected to outperform either the industry or the overall market within 52 weeks, with an average target price of $173.38.
Disclosure: I have no positions in any security mentioned.
