The soft revenue and bookings guidance provided with Accenture's (ACN -3.8%) FQ4 results are oveshadowing the company's dividend hike and $5B buyback expansion. Consulting/outsourcing rival IBM (IBM -1.7%) is trading lower in sympathy. Wipro (WIT -3.2%) is also selling off, but outsourcing peers Infosys (INFY -0.3%) and Cognizant (CTSH -0.6%) have pared their morning losses.
Accenture's CC remarks (transcript) likely aren't helping. CFO David Rowland mentioned that while outsourcing bookings were healthy (book-to-bill of 1.4), all 3 consulting bookings segments - management consulting, tech consulting, and systems integration - were at the low end of its B2B guidance ranges. Total consulting B2B was 1.0
Rowland adds Accenture thinks the "cycle of lower growth" it has seen in recent quarters "won't change much" near-term.
Echoing comments from Cisco's John Chambers, CEO Pierre Nanterme mentioned Accenture is seeing more emerging markets "volatility," even as the U.S. performs well and Europe stabilizes.
Janney's Joseph Foresi is staying bullish, arguing Accenture is "well positioned given its high end capabilities to gain market share as outsourcing becomes more commoditized."