Accenture stock jumped Thursday despite the technology consulting firm reporting fiscal third-quarter earnings and sales slightly below expectations. Accenture touted growing bookings, helped by demand for generative artificial intelligence.
Early Thursday, Accenture said it earned an adjusted $3.13 per share on sales of $16.47 billion in the quarter ended May 31. On average, analysts projected the company would post adjusted earnings of $3.16 per share on sales of $16.54 billion, according to FactSet.
In the same period a year earlier, the Dublin, Ireland-based company posted adjusted earnings of $3.19 per share on sales of $16.57 billion.
In recent action on the stock market today, Accenture stock jumped 7.7% to 307.23.
AI Bookings Give Accenture A Boost
Meanwhile, Accenture said it recorded $900 million in new bookings related to generative AI in the quarter, with $2 billion in generative AI bookings for its fiscal year to date.
"We achieved strong new bookings of over $21 billion, up 22% over last year, and continued to accelerate our strategy to be the reinvention partner of choice," Accenture Chief Executive Julie Sweet said in a news release.
For the current quarter ending with August, Accenture guided to sales of $16.05 billion to $16.65 billion. Analysts were projecting Accenture's sales would reach $16.53 billion for the August quarter prior to Accenture's guidance, according to FactSet.
Investors were much harsher on Accenture stock last time the company reported earnings. Shares tumbled 8% after Accenture's Q2 report in March, when the company lowered its sales outlook for the rest of the year.
The company's previous performance dampened expectations heading into the third-quarter report, according to Barclays analyst Ramsey El-Assal. He noted that Accenture's May-quarter revenue beat expectations when adjusted for currency fluctuations — which may have been good enough to help drive the stock higher.
"Bookings remained strong and margins came in a bit above estimates," El-Assal wrote to clients Thursday. "Today's results represent an upside surprise vs. softer expectations, driving positive price action."
El-Assal holds a positive overweight rating on Accenture stock, with a price target of 350.
Accenture Stock: Technical Ratings
Prior to earnings, Accenture stock was flat in Tuesday trading ahead of the stock market's closure Wednesday for Juneteenth. Shares are down 18% this year and off 9% in the past 12 months.
Coming into the report, Accenture stock had an IBD Composite Rating of 42 out 0f 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Accenture's IBD Relative Strength Rating was 18 out of 99.
