Accenture Plc (ACN) has won a five-year application outsourcing contract from Nordea, which is a leading banking and financial services group. This is the second major contract win by Accenture recently. In March, Accenture was awarded a $200 million contract by the Starwood Hotels & Resorts Worldwide Inc. (HOT). Under the contract, which will span a number of years, Accenture will provide a range of IT services including application outsourcing and infrastructure outsourcing. Accenture will develop, maintain and run applications for the hotel company, as well as manage servers, data centers and end-user computers.
The second quarter EPS of 60 cents missed the Zacks Consensus Estimate by 1 cent. Revenue for the quarter was $5.54 billion, declining 2.1% from the year-ago quarter. This apart, the company reported Outsourcing bookings of $3.13 billion, which is expected to provide some support to revenues going forward.
For the fiscal year 2010, the Zacks Consensus Estimate is $2.65, which is inline with the company?s expected EPS range of $2.61 to $2.69. Analysts covering the stock have a negative sentiment on it, as 17 of the 21 analysts have made a downward revision of their estimates in the last 30 days, while there have been no upward revisions. This has lowered the estimate by 7 cents over the last 30 days.
We believe this downward revision took place as the company?s American, European, Middle East and African business have yet to fully recover from the impact of recession. Further, although the company has clocked an average earnings surprise of 2.56%, for the fiscal year 2010, the upside potential is limited, as the most accurate estimate is exactly in line with the Zacks Consensus Estimate of $2.65.
