Accenture signage is pictured in Warsaw, Poland, on Aug. 7, 2024.
leksander Kalka | Nurphoto | Getty Pictures
Shares of Accenture slid Thursday after the consulting agency mentioned tighter federal spending efforts have begun to weigh on its revenues.
Shares tumbled almost 8% in Thursday buying and selling after Accenture’s chief govt officer mentioned in a fiscal second-quarter earnings name that the corporate’s Federal Providers enterprise has misplaced contracts with the U.S. authorities after current evaluations.
“Federal represented roughly 8% of our international income and 16% of our Americas income in FY 2024. As you understand, the brand new administration has a transparent aim to run the federal authorities extra effectively. Throughout this course of, many new procurement actions have slowed, which is negatively impacting our gross sales and income,” chief govt Julie Spellman Candy mentioned within the Thursday name to a number of Wall Road analysts.
Accenture is among the many first of U.S. company giants to get hit by the Trump administration’s so-called Division of Authorities Effectivity, an effort headed by billionaire Elon Musk to downsize federal agencies and consolidate their workplace areas.
Candy added Accenture’s Federal Providers was additionally affected by steering from the U.S. Normal Providers Administration to all federal businesses to assessment their contracts with the highest 10 highest paid consulting companies contracting with the U.S. authorities, after which finish contracts that aren’t thought-about mission-critical to related businesses.
“Whereas we proceed to consider our work for federal shoppers is mission-critical, we anticipate ongoing uncertainty as the federal government’s priorities evolve and these assessments unfold,” Candy mentioned.
Candy added, “We’re seeing an elevated degree of what was already a big uncertainty within the international financial and geopolitical surroundings, marking a shift from our first quarter FY 2025 earnings report in December. On the identical time, we consider the basics of our business stay robust.”
Different consulting firms fell in sympathy. Booz Allen Hamilton shares slid 7.5% on Thursday.
Accenture shares have plunged 22% over the previous month, bringing the inventory down almost 15% yr thus far.
