Contract Wins for Accenture - Analyst Blog

Technology outsourcing and consulting major Accenture Inc. (ACN) is flying high with a number of contract wins this week. Accenture recently announced that KF - The Swedish Cooperative Union has selected its application management services under a multi-year contract.

KF will hire Accenture's services for managing various applications used by its grocery retail business wing, Coop. The terms of the contract covers all the applications that are used in different operating areas, such as marketing, finance and customer service.

Accenture's application management services will help Coop's employees to better understand various processes, improve operational efficiencies and understand future business requirements.

Accenture has also started to provide life insurance policy administration application services to Allianz Life Insurance Company of North America (Allianz Life). The services will facilitate Allianz Life to enhance its product development capabilities and improve customer care services in its annuity business.

Moreover, SEC SERVIZI, a consortium of Italian banks that provides operational and technology services to financial institutions, has deployed Accenture's financial application services to develop and implement a new risk calculation platform.

We believe that continuous deal wins will help Accenture to outperform its own guidance in the first quarter of 2011. We are also optimistic about Accenture's recent acquisition of Ariba. Ariba's expertise should enhance the existing level of Accenture's consulting and outsourcing services, thereby increasing customer demand.

Accenture posted encouraging fourth quarter results, beating the Zacks Consensus Estimate on the back of growing demand, which resulted in solid bookings. New business flow was also good, as tech spending started returning in 2010. However, we prefer to take a cautious stance until there is more sustained revenue growth in the post-recession environment.

Currently, Accenture has a short-term Buy recommendation, as indicated by the Zacks #2 Rank.