Accenture plc ( ACN - Snapshot Report ) is scheduled to announce its fourth quarter fiscal 2012 results after markets close on September 27, 2012. We notice some upward movements in estimates, which are quite expected keeping in view Accenture’s growth prospects.

Third Quarter Overview

Accenture delivered decent third quarter results, beating the Zacks Consensus Estimate by 4 cents on the bottom line. The quarter’s earnings came in at $1.03 per share, up 10.8% from the year-ago quarter. The outperformance was attributable to higher revenues and margins, and lower share count, though higher tax rate and foreign-exchange headwinds posed some threats.

The company’s reported revenue increased 6.5% year over year to $7.2 billion, driven by favorable business mix, wide acceptance of its products and services and solid growth in Outsourcing revenues. Geographical contributions were also encouraging, barring the Euro zone.

Despite higher revenue, gross margin fell short of the year-ago figure due to higher subcontractor costs, recruitment and training costs as well as an increase in annual compensation. But operating cost control measures led to an operating margin expansion by 70 basis points.

Guidance

Accenture projects a slight sequential drop in its fourth quarter 2012 revenue citing a 3% negative foreign-exchange impact.

Management left its fiscal 2012 revenue expectation unchanged. But currency fluctuations prompted lowering of earnings expectations.

For the full story on the earnings release, please look at: Accenture Tops, Euro Concerns Loom.

Agreement of Analysts

The analysts are of opinion that Accenture’s consulting/outsourcing/offshore combination continues to support global enterprise client demand for high-end but cost effective service delivery. Given its global footprint and client base, Accenture will remain well positioned to benefit from multiple technology drivers including cloud initiatives, SaaS (software as a service), mobility, digital marketing, and analytics among others.

The analysts also believe that improved macroeconomic conditions, strong order book, and high demand in the end markets for financial services can positively impact revenue growth in the coming quarters as well.

But the analysts are concerned about the growing foreign exchange headwinds that can have a negative impact on the company’s revenue as most of it comes from outside America. Despite Accenture’s resilient nature, the analysts think that the ongoing difficult economic conditions in Europe could affect Accenture’s revenues in the near term.

Out of the 19 and 20 estimates for the fourth quarter and fiscal 2012, respectively, 2 estimates each were moved upward in the last 30 days. Also, among the 21 estimates for fiscal 2013, 3 went up and 1 dropped in the past 30 days.

Magnitude of Estimate Revisions

The Zacks Consensus Estimate for the fourth quarter and fiscal 2012 remained unchanged at 88 cents and $3.83, respectively over the past 30 days. But we do notice downward movements over the past 90 days. Estimates dropped 6.4% (6 cents) and 0.8% (3 cents) for the fourth quarter and fiscal 2012, respectively. We believe that the downward revisions reflect the European debt concern that could affect Accenture’s business growth in the region.

Recommendation

Despite a weak sequential revenue outlook, Accenture maintained its fiscal expectation, which indicates stable bookings growth. But management’s commentary at the conference call to continue investing in priority industries (such as Communications), emerging markets, geographical expansion as well as to boost its brand value could act as a catalyst for the stock.

Stiff competitive pressure from International Business Machines Corp. ( IBM - Analyst Report ) and Deloitte Consulting LLP, a strained spending environment and Accenture’s broad European exposure are concerns.

However, Accenture carries a Zacks #2 Rank based on positive estimate revisions, implying a short-term Buy rating.