IT services is typically late cycle, so Jefferies doesn't believe the recent macro volatility will be evident in Accenture Plc's (NYSE: ACN) fiscal fourth quarter results to be reported Sept. 27.

We anticipate a generally in-line quarter with potential for modest upside, said Jason Kupferberg, an analyst at Jefferies. We expect Accenture to reiterate its fiscal 2012 guidance, but exposure to discretionary IT spending and Europe lead us to believe upside to this outlook will be much harder to come by than in fiscal 2011. Against this backdrop, we see ACN as fairly valued.

Kupferberg said his checks suggest that Accenture should post solidly in-line fiscal fourth quarter results, and he is comfortable with his revenue/earnings estimates of $6.54 billion/$0.90 per share, which are slightly ahead of the guidance midpoint.

Last quarter, Accenture guided to fiscal fourth quarter consulting bookings increasing sequential, and while Kupferberg believes the company likely achieved this metric (his estimate is about $3.8 billion), he noted the August quarter can be notoriously volatile.

Kupferberg said both his own research and commentary from Accenture's competitors suggest that Tier 1 vendors like Accenture have so far seen very little (if any) impact on client spending from macro volatility.

However, IT services is typically late cycle, and he can't help but have some concern that spending growth on more discretionary project-based IT services could be pressured in 2012, due to both tougher comps and a more challenging macro environment.

Kupferberg expects Accenture to reiterate its fiscal 2012 guidance of 7 percent to 10 percent constant-currency revenue growth and 12 percent-plus earnings per share growth.

He also expects management to provide additional 2012 guidance around metrics such as bookings, operating margins, tax rate, and free cash flow. In addition, he anticipates an ample hike in Accenture's dividend to be announced (current yield is 1.8 percent).

We continue to prefer 'buy' rated Cognizant Technology Solutions Corp. (NASDAQ: CTSH) over 'hold' rated Accenture in large-cap IT Services because: Cognizant's superior growth profile, Cognizant's higher exposure to the secular tailwinds favoring offshore outsourcing, Cognizant's lower European mix, said Kupferberg.

Accenture stock closed Friday's regular trading up 3.77 percent at $55.02 on the NYSE.

Nyse Outsourcing Management