Accenture lowers FY24 sales forecast as clients cut spends

ACCENTURETHURSDAYLOWERED itsrevenueforecastforfiscal2024, with economic uncertainty promptingitsclientstocutspending on its consulting services.

The IT services provider's revised outlook expects full-year revenue growth to be in the range of 1% to 3%, down from its earlier projection of 2% to 5%.

After the announcement, the company’s shares fell by around 5% in pre-market trading on the New York Stock Exchange. The American Depository Receipt (ADR) shares of IT majors Infosys andwiprowerealsotradingupto 4%lowerposttheannouncement.

Accenture has also forecast third-quarter revenue in the range of $16.25 billion to $16.85 billion, below an estimate of $17.01 billion, according to London Stock Exchange Group (LSEG) data. Revenue for its communications, media & technology segment fell 8% year-on-year.

Accenture’s performance is widely regarded as a benchmark for the Indian IT industry, providing a peek into the expected outcome for domestic companies.

The January-march quarter earnings season commences on April 12, with bellwether Tata Consultancy Services (TCS) expected to report its earnings.

Accenture saw its secondquarter revenue at $15.8 billion. New bookings, a key indicator of future revenue, fell 2% to $21.6 billion. Operating margin came in at 13%, compared with 12.3% in the second quarter of FY24. The Dublin-headquartered company follows a Septemberaugust financial year.

Theitmajorreportedrevenue of $15.80 billion, slightly lower than analysts' estimate of $15.84 billion in Q2. It is set to book $450 millioninseverance-relatedcosts this fiscal after recording $1.1 billionthepreviousyear,whenitsaid it would cut around 19,000 jobs, or 2.5% of its workforce.

Reuters Accenture’s performance is regarded as a benchmark for the Indian IT industry.