By Angela Palumbo and Mackenzie Tatananni

Accenture reported better-than-expected quarterly results, but the stock fell as investors focused on risks from the federal government's cost-cutting plans.

The global consulting company posted earnings of $2.82 a share for its second fiscal quarter ended in February, narrowly beating the consensus call for $2.81 among analysts tracked by FactSet. Revenue rose 5% from the previous year to $16.7 billion, topping the $16.6 billion analysts expected.

The company reported new bookings of $20.9 billion in the quarter, a 3% decrease from a year earlier. Bookings associated with artificial intelligence came in at $1.4 billion.

Accenture also adjusted its fiscal-year guidance. The company said it now anticipates earnings between $12.55 and $12.79 a share, versus a prior range of $12.43 to $12.79. The company also narrowed its revenue growth forecast to a range of 5% to 7% after previously guiding for 4% to 7% growth.

Still, shares plunged 9.4% to $292.72 Thursday morning and were on pace for their largest percentage decrease since June 28, 2013, according to Dow Jones Market Data. The stock was the worst performer in the S&P 500 on Thursday, while the index was up 0.2%.

"While guidance was decent and AI bookings continue to grow, the uncertainty around DOGE implications and increasing global uncertainty will likely give investors pause," Edward Jones analyst Logan Purk wrote on Thursday. He rates the stock as a Buy.

DOGE, or the Department of Government Efficiency, is a group established by President Donald Trump's administration, with the purpose of cutting federal spending. This poses a risk to Accenture, which said in its most recent 10-K that its work with clients in the U.S. federal government -- through Accenture Federal Services -- represented about 17% of its North America revenues in fiscal 2024.

"The new administration has a clear goal to run the federal government more efficiently. During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue," management said on the earnings call.

Write to Angela Palumbo at angela.palumbo@dowjones.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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March 20, 2025 11:06 ET (15:06 GMT)

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