By Senad Karaahmetovic
Shares of Accenture (NYSE:ACN) are trading over 3% higher in pre-market Thursday after the IT services company reported better-than-expected Q2 results.
Accenture posted EPS of $2.69 on revenue of $15.8 billion, ahead of the consensus for earnings of $2.49 per share on revenue of $15.61B. Revenue increased 5.1% year-over-year, fueled by the 11% jump in Resources revenue, which offset the 9.6% decline in revenue from the Communications, Media & Technology business unit.
Bookings rose 13% to $22.1B, easily ahead of the consensus for $19.25B. The company reported a Q2 free cash flow of $2.22B.
"Our strong financial results this quarter again demonstrate that our ability to bring together industry, functional and technology expertise as well as managed services continues to differentiate us with our clients. Our record bookings reflect the confidence and trust that our clients have in us to create value and help them transform at speed," said Julie Sweet, chair and CEO.
Sweet also added that ACN is "taking steps to lower our costs in fiscal year 2024 and beyond while continuing to invest in our business and our people to capture the significant growth opportunities ahead."
Accenture said it plans to lay off about 19,000 people, which is roughly 2.5% of its total global workforce, with "over half of these departures will consist of people in our non-billable corporate functions."
"While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs," the company said in a statement.
For this quarter, Accenture expects revenue at $16.4B (up or down $300 million), missing the outlook of $16.59B.
For FY23, the IT company sees EPS at $11.52 (the midpoint), modestly beating the consensus of $11.45. Accenture expects full-year revenue growth of 8% to 10%, slightly lower than the prior +8-11% forecast. The company boosted its FY forecast for operating and free cash flow.
TD Cowen analysts said the results were "healthy" given the "tough" environment.
"S&C contraction (-MSD) was more than expected but offset by growth elsewhere & adj OM was higher supported by biz optimization. Bookings better, but FY23 growth outlook trimmed (now 8-10% as expected)," the analysts said in a note.