Shares of Accenture Plc ACN declined 1.5% to $188 in pre-market trading on Thursday despite beating consensus estimates on GAAP earnings for the fourth quarter of fiscal 2019 by 2 cents.
The Irish global professional services company posted $1.74 per diluted share, reflecting 10% growth from the year-ago quarter. Revenue came in at $11.06 billion, up 5.3% in U.S. dollars, in line with expectations.
By segment (percent change in U.S. dollars), Communications, Media and Technology rose 4% to $2.22 billion in revenue; Financial Services went up 2% to $2.12 billion; and Health and Public Service increased 7% to $1.88 billion. Further, Products gained 6% to $3.1 billion, and Resources grew 9% to $1.73 billion.
By service type (percent change in U.S. dollars), consulting increased 5% to 6.19 billion and outsourcing went up 6% to $4.87 billion.
The company's new bookings were a quarterly record of $12.9 billion, of which $6.1 billion was in consulting bookings and $6.8 billion was in outsourcing bookings.
Additionally, Accenture recorded a 30 basis-point rise in gross margin to 31.1% of total revenue and a 20 basis-point increase in operating margin rate to 14.2% of total revenue.
The company also posted results for the entire year of fiscal 2019. The most relevant were earnings of $7.36 per diluted share on $43.2 billion in revenue, up 5% in U.S. dollars from full fiscal year 2018. The free cash flow increased 10.5% to $6 billion and new bookings added 6.3% to $45.5 billion.
Looking ahead to full fiscal 2020, Accenture projects 5-8% revenue growth from $43.22 billion in full fiscal 2019 and versus consensus estimates of $46.13 billion. The company also expects diluted earnings per share to range between $7.62 and $7.84 compared to expectations of $7.96.
Further, on Nov 15, Accenture will pay an 80-cent cash quarterly dividend to its shareholders of record as of Oct. 17. The ex-dividend date is scheduled for Oct. 16. The distribution produces a forward annual dividend yield of 1.68%, in line with the industry median and short of the S&P 500 index’s yield of 1.88% as of Wednesday.
The share price closed at $190.9 on Wednesday for a market capitalization of $121.8 billion. The share price has climbed 35% this year to above the 120-day simple moving average line, but it is still below the 30- and 70-day lines.
The 52-week range is $132.63 to $202.8.
The 14-day relative strength index of 44 suggests that the stock is neither oversold nor overbought.
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 $200.61.
Disclosure: I have no positions in any security mentioned.
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