SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY
by Erik Hessldahl, courtesy AllThingsD
The business of consulting companies over their information technology needs is slowing down, and one of the companies hardest hit by that fact is Accenture — and its bad vibes are taking down a fairly wide swatch of enterprise-IT companies today.
Accenture reported quarterly earnings yesterday, and while earnings were up, sales missed the expectations of analysts, and the outlook for the current quarter was dour. For the quarter ending in August, Accenture said it sees sales of $6.7 billion to $7 billion, well below the $7.4 billion consensus view of analysts. The company also slashed its outlook for annual profits to a range of $4.18 to $4.22 per share — again, well below its prior forecast of $4.24 to $4.32.
Naturally, Accenture shares are taking a beating today, having fallen by more than $9, or more than 11 percent, by midafternoon ET. But the news is hammering other stocks, too. IBM, which has a huge IT consulting arm, fell by $5.25, or more than two percent. SAP fell by $2.77, or more than three percent.
Accenture said that clients in Brazil and in Europe — still plagued by an economy challenged by austerity measures intended to curb sovereign debt issues — held back on IT spending more than expected.