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Hedge Funds Clash With Wall Street Over This Falling Stock

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Shares of Accenture Plc (NYSE:ACN) lost over 4% in pre-market trading this morning, despite the firm’s positive fourth quarter figures and boosted semi-annual dividend and buyback program, though the losses have now been trimmed to just over 1% in late-morning trading. The culprit appears to be a mostly lower-than-expected earnings forecast for the 2016 fiscal year, and a revenue outlook for the current quarter which was below estimates, driving the company’s shares down today. However, based on Insider Monkey’s data, hedge funds are of a different opinion than Wall Street, viewing Accenture’s stock with gusto in the second quarter.

Accenture ACN

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According to the consulting, outsourcing and technology firm, net income climbed to $788.13 million, or $1.15 per diluted share, in the three months that ended Aug. 31, up from $760.17 million, or $1.08 per diluted share, in the same year-ago quarter. Revenues before reimbursements were reported to be $7.89 billion, up from $7.78 billion last year and would have been up by 12% when adjusted for the impact of foreign exchange. The firm soundly beat analysts’ expectations of earnings of $1.12 per share on revenues of $7.68 billion. For the full fiscal year 2015, Accenture Plc (NYSE:ACN) reported net revenues of $31.05 billion and earnings of $3.27 billion, or $4.76 per diluted share. This is up from net revenues of $30.00 billion and earnings of $3.17 billion, or $4.52 per diluted share, for the previous fiscal year.

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The estimate-beating fourth quarter was largely due to increases in revenues across almost all operating groups of the firm, from Communications, Media & Technology, to Financial Services and Health & Public Service. The only operating groups which experienced revenue declines were the Products and Resources groups. The 10% growth of revenues in North America also helped offset revenue declines in Europe and in growth markets. Along with the positive figures for the fourth quarter and full 2015 fiscal year, the company also announced that its Board of Directors has increased its semi-annual cash dividend by $0.08 per share, or 8%, to $1.10 per share. Furthermore, Accenture also announced that a fresh $5 billion has been earmarked for its share buyback program.

As mentioned, the blame may be put on the firm’s revenue outlook for the fiscal first quarter of 2016 as well as its earnings forecast for the full fiscal year 2016. For the current quarter, Accenture announced that it expects revenues of between $7.7 billion-to-$7.95 billion. Wall Street was expecting the figure to be $8.11 billion. Nonetheless, Accenture says that its revenue range for the current quarter is already adjusted by 8.5% for foreign exchange headwinds. Additionally, the firm expects earnings per diluted share of $5.09-to-$5.24 for fiscal year 2016, largely below the $5.22 per share expected by analysts.

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