Accenture forecasts weaker Q2 revenue amidst IT spending cautiousness

IT services provider Accenture predicted second-quarter revenue below Wall Street expectations, citing client caution in the face of ongoing macroeconomic uncertainty. The company's shares dropped 3% in pre-market trading, despite having shown a 28% gain throughout the year, outperforming the S&P 500 index.

Analysts anticipate subdued spending in the IT services sector in the short term, as businesses traditionally finalize their annual budgets after February. Accenture itself highlighted slower decision-making related to budgets, particularly in the technology and media sectors.

In October, India's IT services giant Tata Consultancy Services reported quarterly results below expectations, while Infosys adjusted its annual revenue forecast downward due to continued client reluctance to invest in discretionary projects. Both companies are competitors of Accenture in the outsourcing business.

For the second quarter, Accenture expects revenue in the range of $15.40 billion to $16.00 billion, falling short of the $16.29 billion forecasted by analysts polled by LSEG. In the first quarter ending on Nov. 30, the company's revenue increased by 3%, reaching $16.2 billion.