Accenture Shares Shoot Higher

Shares of consulting and outsourcing bellwether Accenture (ACN Quote) rose sharply Friday, a day after it reported strong fourth-quarter financial results and made bullish comments about the year ahead.

Shaking off concerns about a slowing U.S. economy, Accenture's forecast hit several key themes on investors' minds and underscored the company's profile as a large-cap growth stock.

And despite a decrease in operating and free cash flow, Accenture added 20% to its annual dividend, signaling confidence in its future ability to generate cash.

"Accenture happens to be one of the best cash-flow stories in the whole sector," said Eric Boyce, portfolio manager for Hester Capital Management. "That's one of the big reasons we own the stock."

Shares were recently trading up $2.10, more than 5.5%, to $40.12, despite a downdraft in the broader market indices.

Accenture's cash flow strength stems largely from its wide profit margins. The company derives nearly 60% of its revenue from consulting contracts that have higher margins than outsourcing.

During the conference call late Thursday, Chief Executive Bill Green also said that pushing through price increases is at the "top of the list in terms of margin expansion."

At the same time, employees in low-cost locations are shouldering more project work and administrative tasks. This helped Accenture pare operating costs as a portion of revenue in the year.

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