IT consulting firm Accenture forecast first-quarter revenue above analysts' estimates, expecting strong demand for its cloud and security services as companies delay return to offices and adopt hybrid work models due to the Delta variant.
Shares of the Dublin, Ireland-based company, which has benefited from pandemic-related restrictions as more enterprises took their businesses online, rose nearly 1.2% in early trading on Thursday. The shares have gained nearly 28% this year.
Demand for IT consulting services has been on the rise as the surging Delta variant of the coronavirus pushed several companies to extend their work from home policies and adopt hybrid work models.
For fiscal 2022, Accenture sees 12% to 15% of revenue growth and expects to spend a similar amount on acquisitions as last year.
"The targeted $4.2 billion in acquisitions embedded in FY22's guidance is consistent with the company's almost 10 year record of acquiring entities that fit within its eco-system of digital based services," said Wedbush analyst Moshe Katri.
Accenture, which has clients including Fortune Global 500 companies across industries such as health and financial services and media, invested more than $4 billion across 46 acquisitions in 2021 to cater to growing demand for its services.
"At the beginning of FY'21, after investing in cloud for a decade, we saw that the pandemic would dramatically accelerate our clients' move to the cloud," Chief Executive Officer Julie Sweet said during an earnings call with analysts.
Total revenue rose about 24% to $13.42 billion in the fourth quarter, in line with analysts' expectation of $13.42 billion, according to Refinitiv IBES data.
On an adjusted basis, Accenture earned $2.20 per share, compared with analysts' estimates of $2.19 per share.
Accenture expects current-quarter revenue to come in between $13.90 billion and $14.35 billion, compared with analysts' estimates of $13.51 billion.
(Reporting by Tiyashi Datta in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli) ((firstname.lastname@example.org))