(Reuters) -IT services firm Accenture Plc forecast first-quarter revenue below expectations on Thursday, weighed down by IT spending cuts amid high inflation and impact from a stronger dollar.
Foreign exchange headwinds have intensified since Accenture’s third-quarter results, with the U.S. dollar at a two-decade high against a basket of currencies and up about 16% so far this year amid sharp Fed rate hikes and rising geopolitical tensions.
This has impacted companies with significant overseas operations including Microsoft, Salesforce and IBM.
Analysts worry a protracted economic slowdown could dent robust IT spending with the cracks already showing after Salesforce cut its annual revenue and profit forecast noting “measured” spending from clients.
A strong dollar typically eats into profits of IT companies that convert foreign currencies into dollars.
The company forecast current-quarter revenue between $15.20 billion and $15.75 billion, compared with analysts’ average estimate of $16.07 billion, according to data from Refinitiv.
The forecast reflects the assumption of about 8.5% negative foreign-exchange impact, the company said.
Revenue for the quarter ended Aug.31 was $15.40 billion compared with analysts’ average estimate of $15.39 billion, according to data from Refinitiv.
(Reporting by Chavi Mehta in Bengaluru;Editing by Vinay Dwivedi)
