Accenture Plc (NYSE:ACN) accentuating on long-term contracts- quarterly revenue drops - ORCL, IBM
Northern, WI 03/30/2013 (avauncer) - It is but natural that strategies will have to change to suit the market weather. Accenture Plc (NYSE:ACN) (Current: $75.97, Up by 1.46%) and sometimes clients draw call all the cards. In the current market scenario, it is becoming more financially viable for Accenture clients to sign up for longer contracts with the company rather than short-term ones. Though this is a sure sign of stability it also affects the immediate profits of the company. The world’s second-largest technology consulting company’s thirds quarter sales could not meet analyst expectations of $7.58 billion. In the quarter ending May its revenue will be in the range of $7.25-$7.5 billion.
Clients on different track
Apart from the first factor, companies have been curbing their expenditure and even companies like Oracle Corporation (NASDAQ:ORCL) (Current: $32.33, Up by 1.19%)
wasn’t able to meet estimates. Pamela Craig the Accenture Chief Financial Officer said that the full year revenue will not meet projections and will increase by 5-8 percent. The 56-year old Craig is also on her way out of Accenture by Aug 31 and will be stepping down from her CFO post by July 1. David Rowland who is currently the senior vice- president of finance will be taking her place.
Company steady on performance
Despite the not-so-impressive gains, Accenture Plc (NYSE:ACN)’s performance has been better than that of International Business Machines Corp (NYSE:IBM) (Current: $213.30, Up by 1.14%) which has experienced a decline of 2 percent in 2012. When companies opt for longer contracts the chances of cancellation or delay are greatly reduced thus adding equilibrium to the business. Accenture has maintained its $4.24-$4.32 per share earnings forecast for 2013 while the analyst forecast is $4.28 per share. Bill Smead of Seattle’s Smead Capital management who is a big Accenture investor said that the company is a no-risk proposition and the $10 million worth of shares that he holds in the company are something that he doesn’t stress about despite the short-term shake-up’s