Accenture, a global tech services and consultancy firm, beat Wall Street estimates for its third fiscal quarter on Thursday but new bookings disappointed. ACN shares fell in the early trading.
Dublin-based Accenture earned $3.19 per share adjusted on sales of 16.56 billion dollars in the quarter ending May 31. FactSet polled analysts who expected Accenture to earn $3.01 per share on sales of 16.49 billion. Accenture's sales increased 3% year-over-year, while its earnings grew 14%.
Accenture's new bookings were $17.2 billion and fell short of Wall Street's $18.25 billion target.
Accenture has also reduced its target revenue growth for the entire fiscal year. It now ranges from 8% to 10%. It forecast revenue growth between 8% and 10% three months ago.
Accenture forecast sales between $15.75 and $16.35 billion for the current quarter. This represents a 2%-6% increase over the same period in 2013. The midpoint, $16.05 billion, was lower than the analysts' consensus estimate of $16.32 for the fourth fiscal quarter.
ACN Stock Drops After Report
ACN shares fell 5.2% in premarket trading today to 297.
In a press release, Chief Executive Julie Sweet stated that "Our third-quarter result reflects solid bookings and revenues, and very strong adjusted operational margin, earnings per shares and free cashflow, which demonstrate the rigor with which we operate our business."
Accenture's top performing industry segment was Health and Public Service, where revenue increased 12% over the past year. Communications, Media and Technology was the only industry segment that saw a decrease in sales, with a 11% drop.
Accenture's recent focus has been on increasing its presence in artificial Intelligence. The company announced last week that it would invest $3 billion in three years to improve its AI capabilities.
Accenture announced expanded relationships on Wednesday with Amazon (AMZN), Microsoft and Alphabet's Google (GOOGL). Accenture's collaborations with Amazon Web Services (AWS), Microsoft, and Google Cloud are related to artificial intelligence.
IBD Stock Checkup. ACN has an IBD composite rating of 88 out 99.