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Accenture (ACN) inventory sank Thursday after the skilled companies agency reported decrease revenue than analysts anticipated for its fiscal 2025 second quarter and its chief government stated authorities spending cuts are hurting gross sales.
The corporate posted earnings per share (EPS) of $2.82 on income of $16.66 billion. Analysts polled by Seen Alpha had projected $2.85 and $16.61 billion, respectively.
Accenture lifted the underside of its full-year income vary projection to five% development from 4% beforehand. It additionally raised the decrease finish of its EPS forecast to $12.55 from $12.43.
Accenture shares, which entered Thursday down almost 15% over the previous yr, have been down greater than 8% quickly after the opening bell to steer S&P 500 decliners.
CEO Says Authorities Spending Cuts Hurting Gross sales
CEO Julie Candy stated in Thursday’s earnings name that the Trump administration’s give attention to authorities spending cuts, headed by Tesla (TSLA) CEO Elon Musk’s Division of Authorities Effectivity, is slowing its gross sales to the federal government.
"As you already know, the brand new administration has a transparent objective to run the federal authorities extra effectively," Candy stated, based on a transcript offered by AlphaSense. "Throughout this course of, many new procurement actions have slowed, which is negatively impacting our gross sales and income."
Candy stated that whereas the corporate believes "our work for federal shoppers is mission-critical, we anticipate ongoing uncertainty as the federal government's priorities evolve and these assessments unfold."
Forward of Thursday's report, Morgan Stanley and Jefferies analysts lower their value targets for the inventory, citing an unsure atmosphere among the many agency's shoppers. Jefferies stated they see Accenture's shoppers as having "turn out to be a bit extra cautious prior to now month."
Morgan Stanley analysts referred to as the post-earning atmosphere for Accenture "difficult" given the Trump administration's give attention to authorities spending cuts, together with a "discretionary spending pullback in response to restrictive commerce measures" throughout the economic system.
UPDATE—This text has been up to date with the most recent share value info and feedback from Accenture CEO Julie Candy.
