MICROSOFT CORPORATION

(MSFT)
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Delayed Nasdaq  -  04:00 2022-08-12 pm EDT
291.91 USD   +1.70%
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Accenture tempers 2022 profit view due to stronger dollar

06/23/2022 | 06:55am EDT

June 23 (Reuters) - IT services company Accenture Plc forecast fourth-quarter revenue below expectations and tempered its fiscal 2022 profit forecast on Thursday, threatened by rising inflation and the impact of a stronger dollar on its overseas earnings. Foreign exchange headwinds have also forced companies such as Microsoft and Salesforce to temper their expectations for the year.

A hawkish Federal Reserve and heightened geopolitical tensions have driven gains in the dollar against a basket of currencies over the last year.

Typically, a stronger dollar eats into the profits of companies that have sprawling international operations and convert foreign currencies into dollars.

Accenture, which makes more than half of its revenue from outside the United States, said it now expects a negative foreign-exchange impact of 4.5% in fiscal 2022, worse than its previous forecast of a 3% forex hit.

Shares of the company fell 2.8% in trading before the bell. They were down about 31% so far this year as fears of aggressive interest rate hikes by the U.S. Fed to tame red-hot inflation led to a sell-off in the tech sector.

After years of muted forex volatility, many companies are now scrambling to protect their earnings from the impacts of currency fluctuation, leading to increased corporate hedging.

Accenture cut the higher end of its annual profit forecast range. It expects fiscal 2022 earnings per share to be in the range of $10.61 to $10.70, compared with its previous estimate of $10.61 to $10.81.

It also forecast fourth-quarter revenue to be in the range of $15.0 billion to $15.5 billion, compared with analysts' average expectation of $15.70 billion, according to IBES data from Refinitiv.

The forecast reflects the company's assumption of a negative 8% foreign-exchange impact, Accenture said.

Revenue for the quarter ended May 31 was $16.16 billion. Analysts on average had expected $16.03 billion in revenue. (Reporting by Chavi Mehta in Bengaluru; Editing by Shinjini Ganguli)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ACCENTURE PLC 1.91% 320.44 Delayed Quote.-22.70%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.00% 0.7121 Delayed Quote.-2.20%
BRITISH POUND / US DOLLAR (GBP/USD) 0.00% 1.213 Delayed Quote.-9.87%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.09% 0.7823 Delayed Quote.-1.00%
EURO / US DOLLAR (EUR/USD) -0.60% 1.0258 Delayed Quote.-9.78%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.05% 0.01256 Delayed Quote.-6.43%
MICROSOFT CORPORATION 1.70% 291.91 Delayed Quote.-13.20%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.02% 0.6453 Delayed Quote.-5.90%
SALESFORCE.COM, INC. 1.69% 189.89 Delayed Quote.-25.28%
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Financials (USD)
Sales 2023 221 B - -
Net income 2023 76 214 M - -
Net cash 2023 81 564 M - -
P/E ratio 2023 28,8x
Yield 2023 0,89%
Capitalization 2 177 B 2 177 B -
EV / Sales 2023 9,50x
EV / Sales 2024 8,13x
Nbr of Employees 221 000
Free-Float 99,6%
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Mean consensus BUY
Number of Analysts 48
Last Close Price 291,91 $
Average target price 332,12 $
Spread / Average Target 13,8%
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Managers and Directors
Satya Nadella Chairman & Chief Executive Officer
Bradford L. Smith President & Chief Legal Officer
Amy E. Hood Chief Financial Officer & Executive Vice President
James Kevin Scott Chief Technology Officer & Executive VP
Hemma Prafullchandra CTO
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