Accenture: Accenture forecasts revenue below estimates on IT spending cut, higher dollar

IT services firm Accenture Plc on Thursday forecast lower-than-expected first-quarter sales, weighed down by cuts in IT spending amid high inflation and the impact of a stronger dollar.

Headwinds in currency markets have intensified since Accenture’s third-quarter results, with the US dollar at two-decade highs against a basket of currencies, and so far this year amid sharp Fed rate hikes and rising geopolitical tensions increased by about 16%.

This has impacted companies with significant overseas operations, including Microsoft, Salesforce and IBM.

Analysts worry that a prolonged economic slowdown could hurt resilient IT spending, with cracks already visible after Salesforce slashed its full-year sales and earnings guidance and revealed “measured” spending from customers.

A strong dollar typically eats away at profits for IT companies that convert foreign currencies into dollars.

The company forecast revenue of between $15.20 billion and $15.75 billion for the current quarter, compared to analysts’ median estimate of $16.07 billion, according to data from Refinitiv.

The forecast reflects an assumption of about 8.5% negative exchange rate impact, the company said.

Revenue for the quarter ended August 31 was $15.40 billion, compared to analysts’ median estimate of $15.39 billion, according to data from Refinitiv.

https://economictimes.indiatimes.com/markets/stocks/earnings/accenture-forecasts-revenue-below-estimates-on-it-spending-cut-higher-dollar/articleshow/94375226.cms Accenture: Accenture forecasts revenue below estimates on IT spending cut, higher dollar

Russell Falcon

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