Shares of professional services major Accenture (NYSE:ACN) are tanking today after the company announced its first-quarter results. Revenue increased by 3% year-over-year to $16.2 billion, aligning with estimates. Furthermore, EPS of $3.27 outpaced expectations by $0.13.
During the quarter, new bookings increased by 14% to $18.4 billion, with generative AI contributing $450 million. Further, Accenture’s Managed Services revenue increased by 6% to $7.77 billion. However, Consulting revenue remained flat at $8.46 billion, and operating margin contracted to 15.8% from 16.5% in the year-ago period.
Looking ahead to Fiscal Year 2024, Accenture expects revenue growth of 2% to 5%. EPS for the year is anticipated to be between $11.97 and $12.32. On the other hand, the company expects a 2% decline in its second-quarter top line due to the adverse impact of foreign currency.
Notably, the company has increased its quarterly dividend by 15% to $1.29. The ACN dividend is payable on February 15 to investors of record on January 18. Accenture expects to return at least $7.7 billion to investors via dividends and share repurchases in 2024.
Is ACN a Good Investment?
Overall, the Street has a Moderate Buy consensus rating on Accenture. After a nearly 34% gain in its share price over the past year, the average ACN price target of $349.38 implies a modest 2.2% potential upside in the stock.
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