Accenture Stock Shoots Up After Q3 Print, CEO Highlights $2B in Generative AI Sales

Accenture Plc ACN reported third-quarter fiscal 2024 sales of $16.47 billion compared with the analyst consensus of $16.55 billion, down 1% Y/Y in U.S. dollars and up by 1.4% in local currency. 

Revenues were slightly above the midpoint of the company’s guided range of $16.10 billion – $16.70 billion. Adjusted EPS of $3.13 missed the analyst consensus of $3.15.

Revenues for the quarter reflect a negative foreign exchange impact of approximately 2%, compared with the negative 1% impact previously assumed. 

New bookings for the quarter were $21.06 billion, with consulting bookings of $9.28 billion and managed services bookings of $11.78 billion.

Adjusted operating income for the quarter was $2.71 billion, or 16.4% of revenues, versus 16.3% in the third fiscal 2023.

Products revenues reached $4.98 billion, flat in U.S. dollars and 2% increase in local currency. Health & Public Service revenues increased by 8% in U.S. dollars and 9% in local currency to $3.52 billion.

Financial Services revenue reached $2.89 billion, down by 8% in U.S. dollars and 5% in local currency. Resources revenue was $2.31 billion, flat in U.S. dollars and up by 3% in local currency.

Communications, Media & Technology revenue was $2.76 billion, a decrease of 4% in U.S. dollars and 1% in local currency.

Dividend: Accenture has declared quarterly cash dividend of $1.29 per share for shareholders of record at the close of business on July 11. This dividend is payable on August 15.

Julie Sweet, chair and CEO, Accenture, said, “We also achieved two significant milestones this quarter — with $2 billion in Generative AI sales year-to-date and $500 million in revenue year-to-date — which demonstrate our early lead in this critical technology. All of this while investing at scale in our business with another 35 acquisitions or $5.2 billion of capital deployed year-to-date.”

Outlook: Accenture expects fourth-quarter revenues of $16.05 billion – $16.65 billion (versus consensus of $16.56 billion).

Accenture expects fiscal 2024 adjusted EPS of $11.85 – $12.00 (prior $11.97 – $12.20) versus consensus of $12.10. For fiscal 2024, the company expects revenue growth of 1.5% – 2.5% (prior 1% – 3%) in local currency vs. $65.23 billion consensus.

For fiscal 2024, the company reiterated operating cash flow of $9.3 billion – $9.9 billion and free cash flow of $8.7 billion – $9.3 billion. 

Price Action: ACN shares are up 8.99% at $311.00 premarket at the last check Thursday.

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