The Zacks Analyst Blog Highlights: Nokia, Accenture, IBM, Huron Consulting Group and Information Services Group

Jul 17, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, July 17, 2013 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Nokia Corporation (NYSE: NOK-Free Report), Accenture Plc. (NYSE: ACN-Free Report), IBM Corp. (NYSE: IBM-Free Report), Huron Consulting Group Inc. (Nasdaq: HURN-Free Report) andInformation Services Group Inc. (Nasdaq: III-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday's Analyst Blog:

Will Nokia Beat Earnings Estimates?

Finnish handset manufacturer Nokia Corporation (NYSE: NOK-Free Report) is set to release its second-quarter 2013 results before the opening bell on Jul 18, 2013.

In the last quarter, the company delivered a 33.33% positive earnings surprise. Let's see how things are shaping up for this announcement.

Factors to Be Considered This Quarter

Nokia continues to struggle in the smartphone business as Android and iOS hold a greater share of the market. Lack of applications in the Windows OS as compared to iOS and Android is mainly attributable for the poor performance. Launch of the much-hyped Samsung Galaxy S4 has only aggravated the problem for Nokia.

However, Nokia's Lumia handset continues to improve and lead the Windows OS (operating system)-based smartphone market, where it holds an impressive 80% market share. Recently, the low-priced Lumia 520 has become the world's most popular windows-based phone and holds an impressive 13.8% market share. Moreover, BlackBerry's dismal performance in the latest quarter provides Nokia an opportunity to capture that company's market share.

Earnings Whispers

Our proven model does not conclusively show that Nokia is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Negative Zacks ESP: This is because the Most Accurate Estimate is 5 cents while the Zacks Consensus Estimate stands at 3 cents. This leads to an ESP of -66.67% for Nokia.

Zacks Rank #3 (Hold): Nokia's Zacks Rank #3 reduces the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of -66.67% combined with a Zacks Rank #3 lower the possibility of an earnings surprise.

Accenture to Buy Mortgage Cadence

Accenture Plc. (NYSE: ACN-Free Report)recently bought Mortgage Cadence, a loan origination software and electronic document management services provider. The financial details of the purchase, which is in sync with its plan to grow through strategic acquisitions, remain confidential.

Mortgage Cadence, will enhance Accenture's technology platform and address the critical needs of financial institutions. The improved technology will help Accenture strengthen its mortgage business process outsourcing services through customized software solutions to mortgage lenders, increasing their operational efficiency while reducing costs.

As per the agreement, Mortgage Cadence will be incorporated into Accenture and the software will become a part of Accenture Credit Services which provides consulting, technology and outsourcing services to financial institutions.

Recently, Accenture also completed the acquisition of the online marketing consultant, Acquity, (Jul 2013), the U.K.-based design agency, Fjord, (May 2013), and digital production services vendor, avVenta Worldwide, (Oct 2012), to enhance its interactive platform.

Accenture is making an effort to enter different business segments and improve its technological base through acquisitions. This has improved its customer base, bookings and performance in the insurance, banking and healthcare sectors. This also reflects a strong demand for Accenture's services, which is in turn favorable for its long-term growth prospects.

On the other hand, stiff competition from Cognizant Technology Solutions Corp. and IBM Corp. (NYSE: IBM-Free Report), a strained spending environment and Accenture's broad European exposure (roughly 40.0%) may temper its growth to some extent.

Currently, Accenture has a Zacks Rank #3 (Hold). Investors can also consider other well-performing technology stocks such as Huron Consulting Group Inc. (Nasdaq: HURN-Free Report) andInformation Services Group Inc. (Nasdaq: III-Free Report). Both the companies carry a Zacks Rank #2 (Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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