(Reuters) -IT services provider Accenture forecast second-quarter revenue below Wall Street targets on Tuesday, anticipating cautious spending by clients as macroeconomic uncertainty remains an overhang.
Analysts expect IT services spending to remain muted in the near term as businesses typically decide their annual budgets only after February. Accenture itself had pointed to slower budget-related decision-making, especially in tech and media companies.
Its revenue from the communications, media & technology industry group fell 10% in the first quarter, while sales from North America, the company’s biggest market, fell 1%, to $7.56 billion.
Tata Consultancy Services, India’s No.1 IT services exporter, reported weaker-than-expected quarterly results in October, while Infosys cut the upper end of its annual revenue forecast, as clients were still hesitant to spend on discretionary projects. Both companies are Accenture’s competitors in the outsourcing business.
Accenture’s shares fell 1.7% in trading before the bell. They have gained over 28% so far this year, outperforming the benchmark S&P 500 index.
The firm reiterated its fiscal 2024 forecasts for revenue growth and profit.
It said its new generative artificial intelligence bookings were worth over $450 million as companies remain experimental with their spending on the technology.
Accenture expects revenue in the range of $15.40 billion to $16 billion. Analysts polled by LSEG had forecast revenue of $16.29 billion.
Its revenue in the first quarter ended Nov.30 rose 3%, to $16.22 billion.
(Reporting by Chavi Mehta in Bengaluru; Editing by Pooja Desai)
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