Shares of Accenture (NYSE: ACN) rose 6% on Thursday, following the company’s announcement of its third-quarter 2024 earnings results. Although revenue and profits missed expectations, the stock jumped after the company reported that it had achieved a new milestone in Generative AI sales. Accenture also updated its guidance for the full year. Here are the main points from the earnings report:
Results miss estimates
Accenture’s revenues for Q3 2024 dipped 1% year-over-year to $16.47 billion, missing the consensus estimate of $16.55 billion. GAAP EPS dropped 3% from last year to $3.04. Adjusted EPS declined 2% to $3.13, missing the target of $3.15.
Generative AI – new milestone
Accenture’s new bookings for the third quarter totaled $21.06 billion, up 22% YoY. Consulting new bookings were $9.28 billion while Managed Services new bookings were $11.78 billion. The company achieved Generative AI new bookings of over $900 million in the quarter, reaching a total of $2 billion year-to-date.
Consulting revenues decreased 3% YoY to $8.46 billion in Q3 while Managed Services revenue increased 2% to $8.01 billion. By segment, Accenture saw revenues decrease in the Communications, Media & Technology, and Financial Services segments while Health & Public Service, Products, and Resources recorded revenue growth.
By geography, revenues in North America rose 1% to $7.83 billion while EMEA revenues fell 2% to $5.78 billion. Growth Markets revenues decreased 4% to $2.86 billion.
Updated outlook
For fiscal year 2024, Accenture now expects revenue growth of 1.5-2.5% instead of the previous range of 1-3%. GAAP EPS is now expected to range between $11.29-11.44 versus the previous range of $11.41-11.64. Adjusted EPS is now expected to be $11.85-12.00 versus the prior expectation of $11.97-12.20.
For the fourth quarter of 2024, Accenture expects revenues to range between $16.05-16.65 billion, representing a growth of 2-6% in local currency.
Dividend
Accenture declared a quarterly cash dividend of $1.29 per share for shareholders of record as of July 11, 2024. The dividend, which is payable on August 15, 2024, represents a 15% increase over the quarterly dividend rate of $1.12 per share in FY2023.