Accenture beats revenue estimates on digital push, shares rise

Visitors look at devices at Accenture stand at the Mobile World Congress in Barcelona

IT consulting firm Accenture Plc (ACN.N) beat analysts’ estimates for third-quarter revenue and profit on Thursday and forecast strong bookings for the current quarter, sending its shares up about 8%.

The company has shifted its focus to offering digital and cloud services, which include managing clients’ social media marketing strategies and helping them move to cloud, in a bid to boost margins.

New bookings grew 4% to $11 billion in the third quarter ended May 31, with digital, cloud and security-related services accounting for about 70% of them, Chief Financial Officer Kathleen McClure said in an earnings call with analysts.

Revenue slipped nearly 1% to $10.99 billion but managed to edge past analysts’ average estimates of $10.87 billion, according to IBES data from Refinitiv.

Excluding items, the company earned $1.90 per share, beating analysts’ estimates of $1.85 per share.

The online consulting and service provider, however, narrowed its fiscal 2020 revenue growth forecast to between 3.5% and 4.5% amid the coronavirus-fueled economic slump. The prior forecast was for a growth of 3% to 6%.

Accenture, which competes with Cognizant (CTSH.O) and major Indian IT companies such as Tata Consultancy Services (TCS.NS) and Wipro (WIPR.NS), expects foreign exchange rates to negatively impact its full-year results by 1.5% compared to fiscal year 2019.

Shares of the company were up at $217.19 in morning trade on Thursday.

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