Accenture Q3 Tops Street, Bookings Down; Lifts FY25 Earnings View, Cuts Margin Forecast; Stock Down

(RTTNews) - Professional services company Accenture plc. (ACN) on Friday reported higher third-quarter earnings and revenues above market estimates, but net bookings declined. Further, the company issued fourth-quarter revenue view, expecting year-over-year growth, and lifted fiscal 2025 earnings and revenue outlook, but trimmed margin forecast.

In the pre-market activity on the NYSE, Accenture shares were losing around 4.8 percent, to trade at $291.70.

Further, Accenture has declared a quarterly cash dividend of $1.48 per share for shareholders of record at the close of business on July 10. The dividend, which is payable on August 15, represents a 15 percent increase over the quarterly dividend rate of $1.29 per share in fiscal 2024.

Looking ahead, for the fourth quarter, the company projects revenues of $17.0 billion to $17.6 billion, representing a growth of 1 percent to 5 percent in local currency.

The Wall Street analysts on average expect the company to report revenues of $17.09 billion. Analysts' estimates typically exclude special items.

For fiscal 2025, Accenture now expects earnings per share to be in the range of $12.77 to $12.89, a growth of 12 percent to 13 percent on a reported basis and up 7 percent to 8 percent on an adjusted basis.

The company previously expected earnings per share to be in the range of $12.55 to $12.79, a growth of 10 percent to 12 percent on a reported basis and up 5 percent to 7 percent on an adjusted basis.

The Street is looking for earnings of $12.75 per share for the year.

Operating margin is now expected to be 15.6 percent, an 80 basis points increase from last year, and a 10 basis points increased from prior year's adjusted operating margin.

The company previously expected operating margin of 15.6 percent to 15.7 percent, 80 to 90 basis points expansion over last year on a reported basis and 10 to 20 basis points growth on adjusted basis.

Further, the firm now expects full-year revenue growth to be 6 percent to 7 percent in local currency, compared to previous estimate of 5 percent to 7 percent growth in local currency.

In its third quarter, Accenture's earnings totaled $2.197 billion or $3.49 per share, compared with $1.932 billion or $3.04 per share last year. The prior year's adjusted earnings per share were $3.13.

Analysts projected earnings of $3.32 per share for the quarter.

The company's revenue for the period rose 7.7 percent to $17.727 billion from $16.466 billion last year with growth in all regions and industry groups. The Street projected revenues of $17.32 billion for the quarter.

Consulting revenues of $9.01 increased 7 percent year-over-year, and Managed Services revenues of $8.72 grew 9 percent from last year.

New bookings for the third quarter were $19.70 billion, a decrease of 6 percent in U.S. dollars and 7 percent in local currency compared to last year. Generative AI new bookings were $1.5 billion.

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