2023-12-19 09:04:36 ET
Accenture Plc (NYSE: ACN) is trading down in premarket on Tuesday even though it reported solid results for its first financial quarter.
Why is Accenture stock down today?
Investors are not content primarily because the guidance failed to meet their expectations.
Accenture expects currency headwinds to cap its revenue at $16 billion in Q2. Analysts, in comparison, were at $16.25 billion. Julie Sweet – Chief Executive of the Irish-American firm said in a press release today:
I’m pleased that we delivered on our commitments in Q1 while strategically investing at scale for future growth.
The professional services company now forecasts $11.97 to $12.32 of per-share earnings (adjusted) for the full year versus the consensus estimate of $12.24. Accenture stock is up more than 35% versus its year-to-date high at writing.
Watch here: https://www.youtube.com/embed/MmAyWhbrG14?feature=oembedAccenture Q1 earnings snapshot
- Earned $1.98 billion versus the year-ago $1.97 billion
- Per-share earnings also edged up from $3.08 to $3.10
- Adjusted EPS printed at $3.27 as per the press release
- Revenue jumped 3.0% year-on-year to $16.22 billion
- Consensus was $3.14 a share on $16.17 billion revenue
Earlier this month, Accenture said it has partnered with Google on a joint business aimed at helping companies adopt generative artificial intelligence to improve operations. CEO Sweet also said on Tuesday:
We continue to lead our industry in Gen AI – the great accelerator of reinvention.
What else was noteworthy?
Other notable figures in the earnings report include a 6.0% increase in managed services revenue to $7.77 billion while consulting revenue remained about flat at $8.46 billion.
Accenture improved its gross margin as well in the first quarter to 33.6% which represents a 70 basis points gain versus last year. At $18.45 billion – its new bookings came in up 14% on a year-over-year basis.
The pullback in this morning may be an opportunity for investors considering JPMorgan recently reiterated its “overweight” rating on Accenture Plc and raised his price objective to $375 which suggests a 10% upside from here.
Jefferies on #Accenture :
— Anisha Jain (@_anishaj) December 19, 2023
Bookings improved meaningfully
Headcount grew 9k after 2 Qtrs of no headcount growth
Rev might be more back half weighted than current expectations
Clients dont appear to be ready to spend yet
New year might start slowly for IT Services group https://t.co/3yqnam59qh
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