Accenture’s signage on August 7, 2024 in Warsaw, Poland.
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Shares Accenture The consulting firm said stricter federal spending efforts have begun to weigh its revenues.
The company’s federal services business lost contracts with the U.S. government after a recent review, and shares fell nearly 8% in trading Thursday, Accenture’s CEO said in a call for second-quarter earnings for the second quarter.
“The federal government accounts for about 8% of our global revenue and 16% of our revenue in the Americas in fiscal 2024. You know, the clear goal of the new government is to operate the federal government more effectively. Along the way, many new procurement actions slowed down, which negatively impacted our sales and revenues.
Accenture Reduce the size of federal agencies and merge their office spaces.
Sweet added Accenture’s federal services are also influenced by the General Services Administration’s guidance to all federal agencies to review their contracts with the top 10 highest-salary consulting firms with the U.S. government contracts and then end contracts that are critical to the agencies involved.
“While we continue to believe that our work for federal clients is crucial, we expect that as government priorities develop and these assessments continue to evolve, we expect uncertainty to continue to be uncertain.”
“We see levels of significant uncertainty already exist in the global economic and geopolitical environment, which marks a shift from December’s earnings report. At the same time, we believe that the fundamentals of our industry remain strong.”
Other consulting firms sympathize. Booz Allen Hamilton Stocks slid 7.5% on Thursday.
Accenture shares have fallen 22% in the past month, and so far the stock has fallen nearly 15%.
