U.S. Government contract wins continue for Accenture plc. (ACN”>ACN). The tech major has secured a $71.0 million contract from the U.S Department of Homeland Security. Accenture would be responsible to further enhance the capabilities of its immigration and border management functions.
The contract is expected to support a biometric and biographic identity management system, named United States Visitor and Immigrant Status Indicator Technology (US-VISIT) program that helps federal, state and local officials determine if travelers can legally enter or remain in the United States.
US-VISIT supplies information to other U.S. Departments State, Customs, Immigration and Coast Guard. This system will be upgraded by Accenture as per the new system which will, in turn, enable biometric information to be shared in real time with the U.S. Department of Justice and U.S. Department of Defense.
Accenture’s ample industry experience has helped it win deals from various industrial sectors, geographical locations and governments. The steady demand for its cloud computing, virtualization, systems integration, enterprise resource planning and other application services has helped the company generate four straight quarters of double-digit sales and earnings growth.
Moreover, different industry sources also confirm the fact that a growing headcount in low-cost locations (currently around 60.0% of the total) and steady fundamentals are pointing to the demand for offshore IT.
Moreover, improving trends in the consulting/outsourcing segment, as well as a stronger ERP business are positives for Accenture’s business fundamentals.
Accenture seems to be seeing momentum. This can be inferred from its commentary in the conference call, in which management mentioned that the company would continue to invest in priority industries (such as Communications) and emerging markets, as well as boost its brand value. We believe the company’s confidence in taking such decisions amidst global concerns is backed by its five consecutive quarters of outperformance.
We are encouraged by the steady flow of new business and believe that the trend will continue. However, increasing competition from International Business Machines Inc. (IBM), a strained spending environment and Accenture’s broad European exposure may temper its growth prospects to some extent.
Currently, Accenture has a short-term Hold recommendation, denoted by the Zacks #3 Rank.
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