Accenture Predicts Low First-Quarter Revenue Amid Economic Uncertainty
In Brief
Accenture predicts lower first-quarter revenue, citing economic challenges as clients delay projects and reduce deal sizes.
The company’s 2% stock drop reflects broader industry difficulties, resembling issues experienced by IT service leaders Infosys and Tata Consultancy Services.
IT services provider Accenture has forecasted that its first-quarter revenue figures might fall short of Wall Street’s expectations, signaling the challenges posed by a sluggish economy.
Accenture anticipates first-quarter revenue ranging between $15.85 billion and $16.45 billion, a prediction that lags behind the $16.43 billion expected by analysts surveyed by LSEG.
While the company did report a 4% revenue increase to $16 billion in the fourth quarter ended August 31, it still fell slightly short of the $16.08 billion estimates.
According to Reuters, the lower-than-expected revenue projection by Accenture reflects the larger difficulties experienced across the IT services sector. Other prominent companies in the industry, such as Infosys and Tata Consultancy Services, have encountered challenges like reduced demand and clients taking longer to make decisions.
The outlook for Accenture’s first-quarter revenue falling short of expectations is primarily due to clients postponing projects and reducing the size of deals they engage in. This challenge is exacerbated by concerns stemming from the U.S. Federal Reserve’s recent announcement of maintaining higher interest rates for an extended period.
These higher interest rates are expected to delay the recovery of enterprise spending, further impacting Accenture’s revenue prospects.
Accenture’s Shares Experience a Dip
Accenture’s stock experienced a 2% drop in premarket trading. Moreover, the company anticipates adjusted earnings of $11.97 to $12.32 per share for 2024, falling short of the consensus estimate of $12.40 per share.
In the fourth quarter, Accenture reported earnings of $1.37 billion or $2.15 per share, down from $1.67 billion or $2.60 per share in the same period last year.
However, adjusted earnings in the quarter were $2.71 per share, surpassing the FactSet consensus estimate of $2.65. Although fourth-quarter revenue increased to $15.97 billion from $15.42 billion in the previous year, it missed the analyst forecast of $16.07 billion.
Despite this, Accenture’s CEO, Julie Sweet, claims that the company has achieved a strong year with new bookings totaling $72 billion for 2023.
In June, Accenture pledged to invest $3 billion over the next three years to boost its data and AI capabilities and enhance efficiency for its enterprise clients across 19 industries. The company, which has extensive experience in AI consulting, holds over 1,450 patents and has delivered AI solutions to numerous global clients.
The IT firm has also been vocal about the metaverse. Through a partnership with the World Economic Forum (WEF) and Microsoft, Accenture launched a purpose-driven metaverse space “Global Collaboration Village.” In this digital space, organizations can come together to address global challenges.
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About The Author
Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on [email protected].
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Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on [email protected].
