Accenture Plc (NYSE:ACN) stock fells 1.73% (As on June 23, 12:44:19 AM UTC-4, Source: Google Finance) after the company fanned concerns about dwindling IT spending with a quarterly revenue forecast that was below Wall Street estimates. CEO Julie Sweet said clients were “holding back on small deals” in the face of an uncertain economic outlook. The company blamed the weakness on its business catering to the tech, media and communications industries, which have sharply dialed back spending in recent months to cope with slowing growth. Revenue for that group fell 8% in the third quarter. North America, which is Accenture’s biggest market, also performed poorly in the March to May period, with revenue growth slowing there to a near three-year low of about 2%. Consulting revenues for the quarter were $8.69 billion, a decrease of 4% in U.S. dollars and 1% in local currency compared with the third quarter of fiscal 2022. Managed Services revenues were $7.87 billion, an increase of 10% in U.S. dollars and 13% in local currency compared with the third quarter of fiscal 2022.

ACN in the third quarter of FY 23 has reported the adjusted earnings per share of $3.19, beating the analysts’ estimates for the adjusted earnings per share of $3.04. The company had reported the adjusted revenue growth of 3 percent to $16.56 billion in the third quarter of FY 23, which is inline with the analysts’ estimates for revenue of $16.56 billion. Adjusted operating income was $2.71 billion and adjusted operating margin was 16.3%, an expansion of 20 basis points from the third quarter of fiscal 2022.  Gross margin (gross profit as a percentage of revenues) for the quarter was 33.4% compared to 32.9% in the third quarter of fiscal 2022. Selling, general and administrative (SG&A) expenses for the quarter were $2.82 billion, or 17.0% of revenues, compared with $2.71 billion, or 16.8% of revenues, for the third quarter of fiscal 2022. Operating cash flow for the quarter was $3.29 billion, and property and equipment additions were $142 million. Free cash flowwas $3.15 billion. For the same period last year, operating cash flow was $3.06 billion; property and equipment additions were $195 million; and free cash flow was $2.87 billion. Accenture’s total cash balance at May 31, 2023 was $8.5 billion, compared with $7.9 billion at August 31, 2022.

Accenture forecast current-quarter revenue in the range of $15.75 billion to $16.35 billion. Analysts on average expect revenue of $16.35 billion, according to Refinitiv data.