Accenture (ACN) forecasts upbeat 2024 revenue growth on AI boost. June 20 (Reuters) - IT services provider Accenture projected annual revenue growth largely above estimates on Thursday, as growing adoption of artificial intelligence offsets sluggish growth in enterprise spending and a strong dollar. Shares of the company rose more than 10%, after having fallen about 19% this year on market expectations for subdued IT services demand as economic uncertainty and elevated interest rates force companies to rein in spending. Accenture, however, has been a go-to consultant and outsourcing service provider for businesses migrating their operations to the cloud, partially shielding the company from enterprise budget cuts.
It has also benefited from businesses increasingly adopting generative AI technologies to automate certain operations, helping them boost productivity and save costs. "GenAI is acting as a catalyst for companies to more aggressively go after costs ... which creates significant opportunity for us," Accenture CEO Julie Sweet said in a conference call with analysts. Accenture's new bookings, a metric indicating value of customer contracts with a spending commitment, rose to $21.06 billion for the third quarter from $17.25 billion a year ago.
Market Overview:- Accenture shares rose over 10% after forecasting strong annual revenue growth.
- The company has benefited from businesses adopting generative AI technologies.
- New bookings for the third quarter increased to $21.06 billion.
- Accenture has been a key consultant for businesses moving to the cloud.
- Generative AI services bookings for the year exceeded $2 billion.
- Third-quarter revenue was $16.47 billion, slightly below estimates.
- Accenture expects annual revenue to grow between 1.5% and 2.5%.
- The company flagged a negative foreign-exchange impact of 0.7% for the fiscal year.
- Accenture continues to see opportunities from AI technologies.
Third-quarter revenue of $16.47 billion missed estimates of $16.53 billion, while adjusted profit per share of $3.13 also came in below estimates of $3.15. However, the company's focus on AI and cloud migration continues to drive growth and position it well for the future.
The strong performance in AI-related bookings highlights Accenture's ability to adapt to technological advancements and changing market demands. As businesses continue to invest in AI to enhance productivity, Accenture's expertise and service offerings make it a critical partner for enterprises navigating this transformation.
