Accenture Q3 earnings: ‘gen AI will go faster than cloud’

Accenture Plc (NYSE: ACN) is down nearly 3.0% on Thursday even though it reported market-beating results for its third financial quarter.

Why is Accenture stock down today?

The tech stock is trending down primarily because the company disclosed $17.2 billion worth of new bookings – materially below the Street estimates. CEO Julie Sweet said on CNBC’s “Squawk on the Street”:

Clients are prioritising big transformation deals which is our strength. But some of the smaller deals not starting and we did see that go into Europe and growth markets.

Nonetheless, the Fortune 500 firm remains committed to returning $7.1 billion in cash (at least) to shareholders via dividend payments and stock repurchase.

Accenture stock is still up more than 10% for the year.

Accenture’s guidance for the full year

Accenture also tightened its guidance this morning. For the full year, it now forecasts $11.52 to $11.63 of adjusted per-share earnings. According to CEO Sweet:

We see a huge opportunity in continuing to transform the digital core, move people to the cloud, get their data accessible, and we’ve also seen an opportunity in gen A.I. itself.

The Dublin-headquartered company lowered its outlook for revenue to between 8.0% and 9.0%, though. It had previously guided for up to 10% increase.

Wall Street currently has a consensus “overweight” rating on Accenture stock.

Accenture Q3 earnings snapshot

• Earned $2.01 billion versus the year-ago $1.79 billion
• Per-share earnings also climbed from $2.79 to $3.15
• Adjusted EPS printed at $3.19 as per the press release
• Revenue went up 2.5% year-on-year to $16.56 billion
• Consensus was $3.01 a share on $16.49 billion revenue

Last week, Accenture Plc announced a $3.0 billion investment into artificial intelligence. The Chief Executive added today:

Gen AI will go faster than the cloud. It’s at the same place the cloud was a decade ago but we believe that embracing all forms of AI will go much faster.