Global tech services and consulting firm Accenture on Thursday beat Wall Street's estimates for its fiscal third quarter but new bookings disappointed. ACN stock fell on the news.
The Dublin-based company earned an adjusted $3.19 a share on sales of $16.56 billion in the quarter ended May 31. Analysts polled by FactSet had expected Accenture earnings of $3.01 a share on sales of $16.49 billion. On a year-over-year basis, Accenture sales rose 3% while earnings climbed 14%.
However, Accenture reported new bookings of $17.2 billion, missing Wall Street's target of $18.25 billion.
Accenture also trimmed its revenue growth target for the full fiscal year to a range of 8% to 9%. Three months ago, it forecast revenue growth of 8% to 10%.
For the current quarter, Accenture predicted sales of $15.75 billion to $16.35 billion, an increase of 2% to 6% from same period last year. But the midpoint of $16.05 billion was below the consensus estimate of analysts of $16.32 billion for the fiscal fourth quarter.
ACN Stock Sinks After Report
On the stock market today, ACN stock dropped 1.9% to close at 307.25.
"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," Chief Executive Julie Sweet said in a news release.
The top-performing industry segment for Accenture was health and public service, where revenue grew 12% year over year. The only industry segment to see a decline in sales was communications, media and technology, where sales dropped 11%.
Evercore ISI analyst David Togut reiterated his outperform rating on ACN stock after the report.
"Accenture enjoys superior positioning for digital, cloud and security services-related demand, its largest growth drivers, sustainable market share gains, along with modest margin expansion potential and shareholder-friendly capital allocation," Togut said in a note to clients.
Accenture Focuses On Artificial Intelligence
Lately Accenture has been focused on growing its presence in artificial intelligence. Last week, the company announced plans to invest $3 billion over three years in its AI capabilities.
On Wednesday, Accenture disclosed expanded relationships with cloud computing leaders Amazon, Microsoft and Alphabet unit Google. The collaborations with Amazon Web Services, Microsoft and Google Cloud relate to generative artificial intelligence.
Accenture ranks eighth out of 58 stocks in IBD's Computer-Tech Services industry group, according to IBD Stock Checkup. ACN stock has an IBD Composite Rating of 88 out of 99.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
