Accenture (ACN, Financials) shares dropped 7.3% on Thursday, after the company flagged declining revenue from U.S. federal contracts, citing slower procurement cycles and government reviews of consulting arrangements.
In fiscal 2024, the business reported government contracts accounted for 16% of its Americas income and 8% of its worldwide income. Chief Executive Officer Julie Spellman Sweet stated during her fiscal second-quarter earnings conference that cutbacks to current work and delays in new government agreements were hurting expansion.Sweet blamed administrative assessments by the U.S. General Services Administrationwhich has been reevaluating expensive consulting agreementsfor the pause on budgets. She said the company's job is still mission-critical, but she also noted rising uncertainty about government goals.Accenture's federal services unit has reportedly lost business amid these reviews. The company did not name specific contracts or provide estimated revenue losses. Accenture is among the first large consulting firms to report an impact from the Trump administration's newly created Department of Government Efficiency, which is being led by Elon Musk.Though quarterly results were strong, market attention turned to the potential of protracted government austerity. Over the previous month the stock dropped 17.75%.
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