Accenture CEO on Q1 earnings: ‘we continue to lead our industry in Gen AI’

Accenture Plc (NYSE: ACN) is trading down in premarket on Tuesday even though it reported solid results for its first financial quarter.

Why is Accenture stock down today?

Investors are not content primarily because the guidance failed to meet their expectations.

Accenture expects currency headwinds to cap its revenue at $16 billion in Q2. Analysts, in comparison, were at $16.25 billion. Julie Sweet – Chief Executive of the Irish-American firm said in a press release today:

The professional services company now forecasts $11.97 to $12.32 of per-share earnings (adjusted) for the full year versus the consensus estimate of $12.24. Accenture stock is up more than 35% versus its year-to-date high at writing.

Accenture Q1 earnings snapshot

• Earned $1.98 billion versus the year-ago $1.97 billion
• Per-share earnings also edged up from $3.08 to $3.10
• Adjusted EPS printed at $3.27 as per the press release
• Revenue jumped 3.0% year-on-year to $16.22 billion
• Consensus was $3.14 a share on $16.17 billion revenue

Earlier this month, Accenture said it has partnered with Google on a joint business aimed at helping companies adopt generative artificial intelligence to improve operations. CEO Sweet also said on Tuesday:

What else was noteworthy?

Other notable figures in the earnings report include a 6.0% increase in managed services revenue to $7.77 billion while consulting revenue remained about flat at $8.46 billion.

Accenture improved its gross margin as well in the first quarter to 33.6% which represents a 70 basis points gain versus last year. At $18.45 billion – its new bookings came in up 14% on a year-over-year basis.

The pullback in $ACN this morning may be an opportunity for investors considering JPMorgan recently reiterated its “overweight” rating on Accenture Plc and raised his price objective to $375 which suggests a 10% upside from here.