Accenture’s Earnings and Revenue Beat Estimates. Why the Stock Is Tumbling.

“Our third-quarter results reflect solid bookings and revenue and very strong adjusted operating margin, earnings per share and free cash flow, which demonstrates the rigor and discipline with which we run our business,” Chief Executive Julie Sweet said in the earnings report.

WIlliam Blair analyst Maggie Nolan was optimistic about the results. She wrote in a research note that she believes “the performance is a positive read-through for IT services peers and faster-growth IT services companies … as the results indicate that the demand environment is not materially deteriorating further.”

Other IT consulting companies have faced pressure recently as customers have been tightening their budgets amid higher inflation and economic uncertainty.

Shares of Accenture were falling 3.7% Thursday to $301.54. The stock has jumped 13% this year.

The earnings were issued after the company earlier this week announced artificial intelligence collaborations with some of the top tech players, including
Amazon.com
(AMZN),
Microsoft
(MSFT) and
Alphabet
(GOOGL).

Accenture said Wednesday that it was extending its collaboration with Amazon Web Services to help clients “leverage the value of large language models and generative AI for faster business transformation.” The company announced similar collaborations to help Microsoft and Alphabet clients navigate AI.

On the company’s earnings call, management said that Accenture is “well-positioned to be the leading trusted AI partner for the enterprise as they move from exploration to experimentation to reinvention.”

Write to Angela Palumbo at [email protected]