Accenture falls after sales beat estimates
Accenture Plc (ACN), the world’s second- largest technology-consulting company, fell in early trading after forecasting third-quarter sales that fell short of analysts’ estimates.
Revenue will reach $7.25 billion to $7.5 billion in the quarter that ends in May, the Dublin-based company said today in a statement. That missed the $7.58 billion average estimate of analysts compiled by Bloomberg.
After reaching a record earlier this month, Accenture shares have dropped on speculation that businesses are holding back on technology spending, said Arvind Ramnani, an analyst at BNP Paribas SA in New York. Oracle Corp. (ORCL)’s quarterly results missed earnings expectations last week, exacer-
investors’ concern, he bating said.
“The third quarter maybe is a little bit lighter than what I was looking for,” Ramnani said of Accenture’s expectations. The company also said its revenue for the full year would be at the lower end of its previous forecast for 5 percent to 8 percent growth.
The shares were down 2.2 percent to $73.25 at 8:04 a.m. in New York. Through yesterday, they had fallen 4.4 percent since hitting a record of $78.35 on March 8.
The sales expectation marred a quarterly report that surpassed analysts’ expectations for profit and was in line with them for sales, helped by a gain in spending by corporate customers for its advice.
Second-quarter net income rose to $1.1 billion, or $1.65 a share, compared with $643.9 million, or 97 cents, a year earlier. Excluding some items, earnings was $1 a share. Analysts had predicted 97 cents, according to data compiled by Bloomberg.
Accenture’s sales growth has been outperforming International Business Machines Corp. (IBM), the largest provider of technology consulting, which saw that unit shrink 2 percent in 2012. Clients are choosing contracts over longer periods, which may lead to more stable earnings even if the deals don’t produce revenue as quickly, Ramnani said.
“Eventually it increases the level of stability in the business,” said the analyst, who has a hold rating on the stock. “The chance of projects getting canceled or delayed is probably being reduced.”