Accenture (NYSE:ACN) shares fell about 6% on Thursday, even though the company topped fiscal second-quarter estimates.
The decline came as new bookings slipped 3% year-over-year and the company narrowed its full-year revenue growth forecast. CEO Julie Sweet pointed to challenges in Accenture Federal Services, citing slower government procurement under the new administration.
She also noted that the General Services Administration (GSA) has instructed federal agencies to review contracts with the highest-paid consulting firms, including Accenture. While she believes the company's federal work is mission critical, Sweet acknowledged uncertainty as agencies assess their priorities. For Q2 ending Feb. 28, Accenture reported $16.7 billion in revenue, up 5% in U.S. dollars (8.5% in local currency).
GAAP EPS rose 7% to $2.82, both exceeding estimates. Consulting revenue grew 3% to $8.28 billion, while Managed Services rose 8% to $8.38 billion. New GenAI bookings hit $1.4 billion, up from $1.2 billion in the previous quarter. However, overall bookings slipped to $20.91 billion, down 3% year-over-year. Despite the drop, analysts had mixed reactions.
TD Cowen called the results better than feared but noted weaker margins. Vital Knowledge and RBC also highlighted strong revenue but flagged declining bookings and margin pressure. Accenture maintained its $1.48 quarterly dividend and repurchased $1.4 billion in shares during Q2, leaving $5 billion in buyback capacity. Looking ahead, Accenture expects Q3 revenue between $16.9B and $17.5B and full-year growth between 5% and 7%.
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