Leading consultancy firm Accenture's stock fell 7.3% on thursday as public expenditure in the US surpassed revenue. Chief Executive Julie Spellman Sweet disclosed that the Federal services business lost several important contracts as a result of recent government assessments.
 
During the fiscal second-quarter results call, she made her disclosures.
 
In FY 2024, Federal accounted for around 16% of our Americas sales and 8% of our worldwide revenue.  Our sales and income have suffered as a result of the new administration's focus on streamlining government operations, which has postponed several procurement activities, Sweet said.

Accenture's contract is terminated due to reducing concerns
 
The trump administration's Department of government Efficiency (DOGE), which was founded by entrepreneur Elon Musk to close government agencies and office buildings, has been contentious from the beginning and Accenture is the first private company to fall prey to it.  In the same vein, government agencies have been directed by the US General services Administration (GSA) to review and terminate non-essential contracts with the highest-paid consulting firms.  "As government priorities change, we expect continued uncertainty, even though we still believe our federal work is mission-critical," Sweet continued.

Accenture's stock showed higher-than-expected earnings of $2.82 per share on $16.66 billion in sales.  Despite this, its shares dropped sharply as investors' fears about the government's poor expenditure grew. In the past month, Accenture's stock has dropped 22.9%, bringing its year-to-date decrease to 14.5%.  Booz Allen Hamilton's stock fell 8.1%, indicating that the consulting industry as a whole suffered as well.
 
 
 
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SIBY JEYYA

22/03/2025 09:41 AM