Proactive Investors - Accenture PLC (NYSE:ACN) reported higher-than-forecast profits for the fiscal first quarter of 2024 but disappointed investors with its weak sales forecast for the current quarter.
The professional services company reported revenue for 1Q, which ended on November 30, 2023, in line with expectations at $16.2 billion, a 3% year-over-year increase.
Adjusted earnings per share (EPS) increased 6% over the year-ago quarter to $3.27, topping estimates of $3.14.
“Our deep and trusted client relationships are again reflected in the 30 clients with quarterly bookings of more than $100 million,” Accenture CEO Julie Sweet said in a statement.
“And we continue to lead our industry in Gen AI – the great accelerator of reinvention – with over $450 million in new bookings.”
However, Accenture’s sales guidance for the fiscal second quarter disappointed. The company said it expects revenue in the range of $15.4 billion to $16 billion, below estimates of $16.4 billion.
For fiscal 2024, it continues to expect revenue growth of 2% to 5% in local currency and a 3% to 6% increase in adjusted EPS of $11.97 to $12.32.
Analysts at Jefferies wrote in a note to clients that the 2Q guidance miss suggested that management's revenue expectations may be a bit more back-half weighted than current expectations.
"Clients don't appear to be ready to spend yet, which means the new year may start slowly for the whole IT Services group, which has been our primary concern. On a more positive note, both Consulting and Managed Services bookings saw a material quarter-over-quarter improvement, which potentially bodes well for management being able to hit its full-year guidance, which was unchanged," they wrote.
"With 2024 client budgets still not quite finalized, it remains unclear how conservative guidance really is at this time."
The analysts have a 'Hold' rating on the stock and a US$298 price target.
Shares of Accenture traded flat at about US$342 following the release of its 1Q results.