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Sign InAccenture Shares Dip After Disappointing Bookings Despite Strong EPS and Revenue Growth
Alex Vellor
Accenture (NYSE: ACN) saw its shares decline during premarket trading on Friday after the consulting giant reported fiscal third-quarter bookings that fell below market expectations.
| Metric | Reported | Expected | Notes |
|---|---|---|---|
| EPS (Q3) | $3.49 | $3.29 | Exceeded expectations |
| Revenue (Q3) | $17.73 billion | $17.33 billion | Exceeded expectations |
| Bookings (Q3) | $19.7 billion | $21.5 billion | Below expectations |
| Revenue Growth Outlook (FY2024) | 6%–7% | Previous estimate not provided | Updated outlook |
| EPS Forecast (FY2025) | $12.77–$12.89 | $12.55–$12.79 | Raised guidance |
| Stock Reaction (Premarket) | -4% | - | Immediate drop after earnings |
| YTD Stock Performance | -13% | - | As of report date |
The company announced earnings per share (EPS) of $3.49 on revenues of $17.73 billion, reflecting an 8% increase year-over-year. These figures, while impressive, were still shy of analysts' projections of $3.29 in EPS and $17.33 billion in sales, as noted in the latest estimates.
The more alarming figure for investors was the bookings total, which reached $19.7 billion-significantly trailing the anticipated $21.5 billion. This disappointing performance extended across both consulting and managed services segments, which were both underwhelming compared to market forecasts.
In a silver lining for shareholders, Accenture has once again adjusted its revenue outlook for the fiscal year, now estimating a growth range of 6% to 7% for fiscal 2024. Moreover, the company has raised its EPS forecast to between $12.77 and $12.89, compared to a previous range of $12.55 to $12.79 for fiscal 2025, suggesting some confidence in the longer-term financial trajectory.
Despite these positive adjustments to the outlook, investor sentiment took a hit, resulting in a 4% downturn in shares right after the earnings release. When we consider the bigger picture, Accenture's stock is down approximately 13% since the beginning of the year-clearly a bumpy ride for stakeholders in what is otherwise a robust growth narrative.
For traders and investors eyeing Accenture, this news is a classic case of market reaction that underscores the importance of bookings as a leading indicator. While the increase in revenue and EPS guidance shows promise, the shortfall in bookings might raise red flags for those who prioritize consistent growth forecasts. As the trading day unfolds, it will be crucial to monitor how these developments influence market activity and investor sentiment moving forward.
About The Author
Alex Vellor
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