Global technology services and management consulting company Accenture Plc. (ACN) recently entered into a collaboration agreement with a Korean conglomerate Hanwha S&C, spanning over a period of eight years.
As per the terms of the agreement, Accenture and Hanwha S&C will be jointly providing application management services to the financial services firms affiliated to the Hanwha group. The companies will join hands to put together a sales and support team, which will consist of representatives of both companies. It will also push the technology services developed by them to different Korean financial services firms.
Accenture already has a presence in the Financial Services market in Korea and this agreement seems to indicate that the company is deepening its penetration in the region. The company has further plans of expanding in the region and is expected to target big Korean pension funds like National Pension Service among others.
While this is a positive development for the company as far as the Asian market is concerned, Accenture’s American, European, Middle East and African businesses are yet to show meaningful recovery from the recession.
As a result, the company delivered mediocre results in the second quarter, with EPS of 60 cents missing the Zacks Consensus Estimate by 1 cent. Apart from this revenue for the quarter was $5.54 billion, declining 2.1% from the year-ago quarter.
For 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. Based on the dismal performance in most of its geographic segments, analysts covering the stock have a negative sentiment regarding its performance in the upcoming quarter.
This is reflected in the analyst revisions over the last 30 days. During this period, 18 of the 22 analysts covering the stock lowered their estimates, while there was only one upward revision. This has lowered the estimate by 6 cents over the last 30 days.
The current partnership agreement with Hanwha S&C, coupled with some recent deal wins in other regions, is evidence of the fact that Accenture is putting in considerable effort to revive its International business.
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