Accenture reports mixed results in light of FX headwinds

Accenture has reported mixed financial results for the third quarter of 2022, with the company beating Q3 revenue expectations but forecasting Q4 revenue will be below estimates due to the negative impact of foreign exchange rates. Accenture also cut the higher end of its fiscal 2022 profit forecast range.

These challenges are not unique to Accenture and global businesses trading across multiple jurisdictions are all set to be squeezed by challenging currency and inflation headwinds.

Accenture’s Q3 revenue was $16.2bn, up 22 percent in US dollars over the same period last year, while operating income was $2.6bn, a 23 percent increase. Operating margin was 16.1 percent, an expansion of 10 basis points.

New bookings for the quarter were $17.bn, a 10 percent increase from the third quarter last year, with consulting bookings of $9.1bn and outsourcing bookings of $7.8bn.

With rising inflation and the strengthening of the US dollar impacting overseas earnings, Accenture now expects revenues for the fourth quarter of fiscal 2022 to be in the range of $15bn to $15.5bn, reflecting the company’s assumption of a negative 8 percent foreign exchange impact compared with the fourth quarter of fiscal 2021.

Accenture’s business outlook for the full 2022 fiscal year now assumes that the foreign exchange impact on its results in US dollars will be approximately negative 4.5 percent compared with fiscal 2021; the company previously expected a negative 3 percent foreign-exchange impact.

It expects fiscal 2022 earnings per share to be in range of $10.61 to $10.70, compared with its previous estimate of $10.61 to $10.81.

Accenture sees full-year revenue growth between 25.5 percent and 26.5 percent in local currencies, compared with 24 percent to 26 percent previously.

Julie Sweet, Accenture’s chair & CEO, said, “Our very strong financial results for the third quarter reflect continued broad-based demand across markets, services, and industries, and the continued recognition of the outstanding talent of our 710,000 people. We continue to gain significant market share, and our services have never been more relevant as our clients turn to us as the trusted partner for the solutions they need to accelerate growth and become more resilient and efficient.”