Accenture early Thursday reported fiscal second-quarter earnings that topped estimates amid its acquisition spree. The company lowered its full fiscal year revenue outlook, sending Accenture stock lower.
Accenture earnings for the quarter ended Feb. 29 rose 3% to $2.77 per share on an adjusted basis, said the Dublin-based global tech services and consulting firm. Including acquisitions, revenue was flat at $15.8 billion, Accenture said.
Analysts expected Accenture earnings of $2.66 a share on sales of $15.86 billion.
Accenture said it now expects full-year revenue growth in a range of 1% to 3% versus its earlier forecast of 2% to 5% growth.
Accenture Stock: Artificial Intelligence A Bright Spot
On the stock market today, Accenture fell 8.3% to 348.82 in morning trading. With the move, shares fell below key support at the stock's 50-day moving average.
At Susquehanna, analyst James Friedman downgraded Accenture stock to neutral from positive. "There is something in the weather for IT Services, and even Accenture is getting wet," he said.
Heading into the Accenture earnings report, shares were up 8% in 2024.
For its third fiscal quarter, which ends in May, Accenture said it expects revenue in a range of $16.25 billion to $16.85 billion. Analysts called for revenue of $17.02 billion.
"The weakness appears to be in consulting," said Jefferies analyst Surinder Thind in a report. "On a positive note, demand for AI projects continues to accelerate with (fiscal Q2) bookings totaling $600 million, up 50% quarter-over-quarter."
In 2023, Accenture hiked its quarterly dividend by 15% to $1.29 a share. It also added $4 billion to a stock buyback program.
Accenture Acquisition Spree
Meanwhile, Accenture continues to make acquisitions to move into digital marketing, cloud computing services and artificial intelligence.
"The worsening discretionary IT services spending environment drove (fiscal Q2) new bookings down 2% year-over-year," said Evercore ISI analyst David Togut, in a report.
He added: "We would be buyers of Accenture, despite the weak short-term environment, as we continue to believe Accenture enjoys sustainable market share gains, along with modest margin expansion potential and shareholder-friendly capital allocation."
Further, Accenture stock has a Relative Strength Rating of 83 out of a best-possible 99, according to IBD Stock Check Up.
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Follow Reinhardt Krause on X, formerly Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
