IT giant, Accenture expects revenue to be in the range of $15.75 billion to $16.35 billion, an increase of 2% to 6% for the fourth quarter of 2023. It reflects the company's assumption of a flat foreign-exchange impact compared with the fourth quarter of fiscal 2022. This is below Wall Street's estimates. For the full year 2023, the revenue growth is seen at 8% to 9%.
While announcing its Q3 earnings, Accenture also declared its business outlook for Q4 and the full year 2023.
The Irish-American professional services company expects revenues for the fourth quarter of fiscal 2023 to be in the range of $15.75 billion to $16.35 billion, an increase of 2% to 6% in local currency, reflecting the company’s assumption of a flat foreign-exchange impact compared with the fourth quarter of fiscal 2022.
As per Refinitiv data, analysts on average expected revenue of $16.35 billion for Accenture in Q4.
The share price of Accenture traded in red on Thursday. It was currently down by 1.32% to trade at $313.20 per share. However, in the pre-market, the shares nosedived by over 5.3%.
While for the full year 2023, the company now assumes that the foreign-exchange impact on its results in U.S. dollars will be approximately negative 4% compared with fiscal 2022. It needs to be noted that the company previously expected a negative 4.5% foreign-exchange impact.
For 2023, Accenture now expects revenue growth to be in the range of 8% to 9% in local currency --- lower compared to the earlier growth projection of 8% to 10%.
Moving on, Accenture expects GAAP operating margin for fiscal 2023 to be 14.2% compared to a range of 14.1% to 14.3% previously.
The adjusted operation margin which also includes $800 million for business optimization costs --- is expected to be at 15.4% --- expanding by 20 basis points from fiscal 2022.
Meanwhile, for full year, Accenture continues to expect operating cash flow to be in the range of $8.7 billion to $9.2 billion. However, now it also expects property and equipment additions to be around $600 million, lower compared to $700 million previously.
It also expects free cash flow to be in the range of $8.1 billion to $8.6 billion in 2023, compared to $8.0 billion and $8.5 billion previously.
Moreover, in Q3 of 2023, Accenture posted a revenue of $16.6 billion, up by 3% in US dollars and 5% in local currency compared to the same quarter a year ago.
While in Q3, GAAP operating income was $2.36 billion, compared to $2.60 billion for the third quarter last year, and operating margin was 14.2% compared to 16.1% for the third quarter last year. Adjusted operating income was $2.71 billion and adjusted operating margin was 16.3%, an expansion of 20 basis points from the third quarter of fiscal 2022.
Julie Sweet, chair and CEO, Accenture, said, “Our third quarter results reflect solid bookings and revenue and very strong adjusted operating margin, earnings per share and free cash flow, which demonstrates the rigor and discipline with which we run our business."
She added, "The strength of our strategy to be our clients’ transformation partner of choice continues to resonate, with 26 clients with quarterly bookings of $100 million or more; and our business model — which for decades has been built around the diversity of our markets, industries and services — along with our more than 730,000 talented people position us well to continue to deliver 360° value for our clients and stakeholders every day.”
In the third quarter, Accenture's new bookings were to the tune of $17.2 billion, with consulting bookings of $8.9 billion and managed services bookings of $8.3 billion.
Currently, the IT sector is facing lower demand in the United States.
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