Accenture ( ACN ) stock sank Thursday after the professional services firm reported lower profit than analysts expected for its fiscal 2025 second quarter and its chief executive said government spending cuts are hurting sales.
The company posted earnings per share (EPS) of $2.82 on revenue of $16.66 billion. Analysts polled by Visible Alpha had projected $2.85 and $16.61 billion, respectively.
Accenture lifted the bottom of its full-year revenue range projection to 5% growth from 4% previously. It also raised the lower end of its EPS forecast to $12.55 from $12.43.
Accenture shares, which entered Thursday down nearly 15% over the past year, were down more than 8% soon after the opening bell to lead S&P 500 decliners.
CEO Says Government Spending Cuts Hurting Sales
CEO Julie Sweet said in Thursday's earnings call that the Trump administration's focus on government spending cuts , headed by Tesla ( TSLA ) CEO Elon Musk's Department of Government Efficiency , is slowing its sales to the government.
"As you know, the new administration has a clear goal to run the federal government more efficiently," Sweet said, according to a transcript provided by AlphaSense. "During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue."
Sweet said that while the company believes "our work for federal clients is mission-critical, we anticipate ongoing uncertainty as the government's priorities evolve and these assessments unfold."
Ahead of Thursday's report, Morgan Stanley and Jefferies analysts cut their price targets for the stock, citing an uncertain environment among the firm's clients. Jefferies said they see Accenture's clients as having "become a bit more cautious in the past month."
Morgan Stanley analysts called the post-earning environment for Accenture "challenging" given the Trump administration's focus on government spending cuts, along with a "discretionary spending pullback in response to restrictive trade measures" across the economy.
UPDATE—This article has been updated with the latest share price information and comments from Accenture CEO Julie Sweet.
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