Accenture shares jump 7% as margins expand, discloses GenAI new orders of $900 million in the latest quarter

IT major Accenture, on Thursday, reported its results for the quarter ending in May following which shares of the firm closed over 7% higher in the US.

The firm’s revenue declined 1% in US dollars at $16.5 billion compared to the third quarter of fiscal 2023. Operating income stood at $2.63 billion, compared to $2.36 billion for the third quarter of fiscal 2023.

Operating margin came in at 16%, compared to 14.2% for the third quarter last year. Adjusted operating income stood at $2.71 billion on an adjusted operating margin of 16.4%, compared to 16.3% for the third quarter last year.

The firm reported a significant uptick in its new order bookings which rose 22% to $21.06 billion. consulting new bookings stood at $9.28 billion, or 44% of total new bookings while managed services new bookings came in at $11.78 billion, or 56% of total new bookings.

GAAP net income for the quarter came in at $1.98 billion, compared with $2.05 billion for the third quarter of fiscal 2023. The company did witness a decline in its GAAP earnings per share (EPS) of $3.04, down 3% from the third quarter of fiscal 2023 while adjusted EPS came in at $3.13, registering a 2% fall.

However, the highlight of the earnings announcement came in the form of the new order bookings for Generative AI (GenAI) of over $900 million for a total of $2 billion for the fiscal on year-to-date basis.

The firm increased its quarterly cash dividend by 15% to $1.29 per share.

The firm now expects full-year revenue growth of 1.5% to 2.5% in local currency and full-year foreign-exchange impact of -0.7%. The company guided for an EPS of $11.29 to $11.44 and an adjusted EPS of $11.85 to $12 and continues to expect a GAAP operating margin of 14.8%.

Shares of the company have lost nearly 12% since the beginning of the year. The stock has lost over 2% in the last one year.