Accenture (NYSE:ACN) likely faces a challenging business climate when it reports its earnings numbers for its fourth quarter before the market opens on Wednesday.
Accenture is a multibillion-dollar global management consulting, technology and outsourcing services company. And its outsourcing business led to a clean beat in its third quarter.
But the performance of the company's management consulting business will be of most concern to investors in its Q4, a report Monday from research group Trefis says.
"This division has failed to deliver growth, as revenues have been flat or declining due to two primary factors," the report said. "Firstly, the business climate remains challenging as clients continue to shy away from discretionary IT spending. Secondly, Accenture continues to book long-term contracts, which take longer to convert to revenue. Furthermore, pricing pressure continues to suppress the growth in consulting. We expect this trend to continue in Q4, which will suppress growth from consulting. Poor economic data, particularly from China and Europe, continue to temper global business sentiment. Therefore we expect the company to report a slowdown in consulting orders in Q4."
Analysts polled by Thomson Reuters expect Q4 earnings per share minus items of $1.10, up 9% from the year-earlier period.
Revenue is expected to rise 7% to $7.61 billion.
For the year, analysts expect earnings per share ex items of $4.53, up nearly 8% and revenue to increase 4% to $29.83 billion.
For the current quarter, analysts expect an EPS of $1.23, up 7%, and revenue to climb 6% to $7.8 billion.
Accenture stock rose a fraction in early trading on the stock market today. Shares are down about 3% for the year.
Read More At Investor's Business Daily: http://news.investors.com/technology/092314-718554-accenture-consulting-business-faces-challenge-in-q4.htm#ixzz3EEUv94Sz
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