Accenture (ACN) shares suffered their worst single-day decline on record after the company issued a disappointing financial outlook. The consulting giant beat fiscal third-quarter earnings per share estimates. However, the company missed revenue expectations for the period.
Management lowered its full-year revenue growth forecast to a range of 3% to 4% in local currency. This guidance represents a decrease from the previous projection of 3% to 5%. Clients are pulling back on discretionary spending amid geopolitical uncertainty and a decline in new bookings.
Weak guidance for the upcoming quarter also fell short of analyst expectations. TD Cowen and Morgan Stanley issued downgrades and price target cuts following the report. The results dragged down stocks across the IT services sector.
Investors view Accenture’s performance as a proxy for the health of corporate IT budgets. Commentary suggests that demand for enterprise software and IT projects will remain under pressure through year-end.