Accenture forecasts Q2 revenue below estimates on IT spending weakness
IT SERVICES provider Accenture forecast second-quarter revenue below Wall Street targets on Tuesday (Dec 19), anticipating cautious spending by clients as macroeconomic uncertainty remains an overhang.
Analysts expect IT services spending to remain muted in the near term as businesses typically decide their annual budgets only after February. Accenture itself had pointed to slower budget-related decision-making, especially in tech and media companies.
Its revenue from the communications, media & technology industry group fell 10 per cent in the first quarter, while sales from North America, the company’s biggest market, fell 1 per cent, to US$7.56 billion.
Tata Consultancy Services, India’s No 1 IT services exporter, reported weaker-than-expected quarterly results in October, while Infosys cut the upper end of its annual revenue forecast, as clients were still hesitant to spend on discretionary projects. Both companies are Accenture’s competitors in the outsourcing business.
Accenture’s shares fell 1.7 per cent in trading before the bell. They have gained over 28 per cent so far this year, outperforming the benchmark S&P 500 index.
The firm reiterated its fiscal 2024 forecasts for revenue growth and profit.
It said its new generative artificial intelligence bookings were worth over US$450 million as companies remain experimental with their spending on the technology.
Accenture expects revenue in the range of US$15.4 billion to US$16 billion. Analysts polled by LSEG had forecast revenue of US$16.29 billion.
Its revenue in the first quarter ended Nov 30 rose 3 per cent, to US$16.22 billion. REUTERS
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