Accenture warns of foreign exchange hit amid sturdy IT companies’ demand

Accenture warns of foreign exchange hit amid sturdy IT companies’ demand

The Accenture PLC emblem is seen on a smartphone in entrance of the identical emblem proven on this illustration taken December 1, 2021. REUTERS/Dado Ruvic/Illustration

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Sept 22 (Reuters) – Accenture Plc warned on Thursday that this yr’s greenback good points would harm its fiscal 2023 outcomes, whilst sturdy demand for digital choices helped main quarterly earnings estimates for IT companies.

US companies with massive operations overseas, akin to Microsoft (MSFT.O) and Salesforce, have in current months pointed to the strongest toll on the greenback in twenty years.

Accenture, which generates greater than half of its income outdoors the US, expects a 6% hit to greenback leads to fiscal 2023. A powerful greenback usually eats into the income of corporations that convert foreign exchange. in {dollars}.

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The corporate’s first-quarter income forecast of $15.20 billion to $15.75 billion was additionally under the $16.07 billion anticipated by analysts, in line with Refinitiv information.

Whereas the annual income forecast was barely larger than estimates, the earnings outlook was effectively under Wall Avenue’s.

Nevertheless, demand for IT companies stays sturdy from corporations seeking to develop their digital presence, considerably shielding the sector.

Accenture, whose choices embrace cloud and safety companies, reported new bookings of $18.4 billion for the fourth quarter ended Aug. 31, the second highest on file.

Analysts have warned that an financial slowdown may hit IT budgets, and cracks have already begun to indicate after “measured” buyer spending pressured Salesforce to slash its forecasts. learn extra

“The priority about Accenture and different IT consulting companies is the rising indication that new IT deployments are being held up,” mentioned Erik Bradley, chief strategist at analysis agency ETR.

“Preliminary expectations for complete 2023 spending are presently at 5.9% development for subsequent yr, a average quantity in comparison with current years.”

Quarterly income was largely in step with estimates, whereas earnings beat expectations. Accenture elevated its dividend by 15% to $1.12 a share and mentioned it might purchase again a further $3 billion price of shares.

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Reporting from Chavi Mehta in Bangalore; Edited by Vinay Dwivedi

Our requirements: the Thomson Reuters Belief Rules.

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