Accenture forecasts Q4 revenue below estimates, shares fall 2% in pre-market trading
Amid rising economic uncertainty, Accenture forecasts tight IT budgets will prevent businesses from signing fresh contracts
- Jun 22, 2023,
- Updated Jun 22, 2023 6:37 PM IST
IT major Accenture on Thursday said that its forecast for fourth-quarter revenue is below the Wall Street estimates on the basis of rising economic uncertainty, which will keep IT budgets tight and prevent businesses from signing fresh contracts.
The shares of the company fell 2% in pre-market trading following the forecast.
The demand for IT services in the United States also remains weak. Indian IT giant Tata Consultancy Services (TCS) in April said that US recovery hadn’t materialised as expected and had, in fact, worsened.
Cognizant Technology Solutions also last month said that it faced pressure in signing stalled contracts due to softer discretionary spending.
Accenture has forecast current-quarter revenue in the range of $15.75 billion to $16.35 billion. Analysts on average expect revenue of $16.35 billion, according to Refinitiv data.
Revenue for the quarter ended May 31 was $16.56 billion, in line with estimates.
The US banking, financial, services and insurance (BFSI) sectors are a key revenue segment for Indian IT services companies. A banking crisis in the US and Europe can directly hurt inflows and growth in the IT firms operating in this sector along with the US Federal Reserve tipped to increase interest rates later this year.
JPMorgan, in March said that Tata Consultancy Services and Infosys have a potential exposure to the collapsed Silicon Valley Bank with a small rival LTIMindtree also affected.
The regional banks in US currently account for 2-3% TCS and Infosys revenues.
India's IT industry is already facing a challenging macroeconomic environment in its key markets of Europe and the United States, where technology spending is contracting amid delays in decision-making on long-term deals as the pandemic-led surge in demand faded.
(With inputs from Reuters)
IT major Accenture on Thursday said that its forecast for fourth-quarter revenue is below the Wall Street estimates on the basis of rising economic uncertainty, which will keep IT budgets tight and prevent businesses from signing fresh contracts.
The shares of the company fell 2% in pre-market trading following the forecast.
The demand for IT services in the United States also remains weak. Indian IT giant Tata Consultancy Services (TCS) in April said that US recovery hadn’t materialised as expected and had, in fact, worsened.
Cognizant Technology Solutions also last month said that it faced pressure in signing stalled contracts due to softer discretionary spending.
Accenture has forecast current-quarter revenue in the range of $15.75 billion to $16.35 billion. Analysts on average expect revenue of $16.35 billion, according to Refinitiv data.
Revenue for the quarter ended May 31 was $16.56 billion, in line with estimates.
The US banking, financial, services and insurance (BFSI) sectors are a key revenue segment for Indian IT services companies. A banking crisis in the US and Europe can directly hurt inflows and growth in the IT firms operating in this sector along with the US Federal Reserve tipped to increase interest rates later this year.
JPMorgan, in March said that Tata Consultancy Services and Infosys have a potential exposure to the collapsed Silicon Valley Bank with a small rival LTIMindtree also affected.
The regional banks in US currently account for 2-3% TCS and Infosys revenues.
India's IT industry is already facing a challenging macroeconomic environment in its key markets of Europe and the United States, where technology spending is contracting amid delays in decision-making on long-term deals as the pandemic-led surge in demand faded.
(With inputs from Reuters)