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Accenture plc (NYSE: ACN), a global leader in consulting and professional services, has recently experienced notable fluctuations in its stock performance. Several factors, including government policy shifts and internal financial metrics, have influenced these changes. This analysis delves into Accenture stock price movements, financial results, and the broader market context.
On March 20, 2025, Accenture stock price closed at $300.91, reflecting a significant decline of 7.3% from the previous day. This drop marked the stock's lowest point since June of the previous year and positioned it 24.5% below its 52-week high of $398.35, achieved on February 5. The trading volume surged to approximately 10.7 million shares, markedly higher than the 50-day average of 3.0 million shares.
Accenture reported its second-quarter fiscal 2025 results on March 20, 2025. The company posted revenues of $16.66 billion, a 5% increase in U.S. dollars and an 8.5% rise in local currency compared to the same period in the previous year. Diluted earnings per share (EPS) stood at $2.82, reflecting a 7% year-over-year increase. New bookings for the quarter totaled $20.9 billion, indicating a 3% decrease in U.S. dollars and stability in local currency terms.
A significant factor contributing to Accenture's recent stock decline is the U.S. federal government's initiative to reduce spending, spearheaded by the Department of Government Efficiency (DOGE), led by Elon Musk. This campaign has led to the cancellation of several multimillion-dollar contracts with major consulting firms, including Accenture. The company's federal services unit has experienced a slowdown in new procurement actions, negatively impacting sales and revenue. Notably, U.S. federal government contracts accounted for approximately 8% of Accenture's global revenue in the last quarter, amounting to about $1.33 billion.
The announcement of reduced government contracts has not only affected Accenture but also had repercussions across the consulting sector. Companies like IBM and Booz Allen Hamilton have also faced scrutiny and potential revenue impacts due to the government's cost-cutting measures. Analysts express caution, highlighting uncertainties surrounding the implications of DOGE's initiatives and their potential effects on firms heavily reliant on federal contracts.
In light of these developments, Accenture has adjusted its fiscal 2025 outlook. The company now anticipates revenue growth between 5% and 7% in local currency, narrowing the previous range of 4% to 7%. The operating margin is expected to be between 15.6% and 15.7%, reflecting an expansion of 10 to 20 basis points over the adjusted operating margin for fiscal 2024. Diluted EPS is projected to be in the range of $12.55 to $12.79.
Accenture's recent stock performance underscores the company's exposure to external factors, particularly government spending policies. While the firm has demonstrated resilience through revenue growth and strategic adjustments, the evolving landscape of federal expenditures presents challenges that could influence future financial outcomes. Stakeholders should monitor these developments closely, considering both the immediate impacts and long-term implications for Accenture's market position and financial health.
